JKH Cinnamon Life held up due to contractor delays
The John Keels Holdings (JKH) says their Cinnamon Life mixed-development project has encountered delays due to the monsoons and this is slated to be completed in three years, officials said. ”This site (at Slave Island, Colombo 2) has a high water table and the project has to go through piling 1200 piles for some 1 year and 3 months. But for seven months of last year, Colombo had the highest rainfall which is why it got delayed,” Ajit Gunewardene, Deputy Chairman, JKH told the Business Times. He added the contractor hadn’t anticipated the monsoons and the de-watering took time. “It was a 100 per cent contractor delay. The project now continues full steam ahead.”
The project is envisioned as a 4.5 million-square-foot integrated resort, comprising an 800-room luxury Cinnamon hotel, residential apartments, state-of-the-art office spaces, a wide variety of food and beverage offerings, and ballroom, conferencing, theatre and banqueting spaces.
The Property Sector group Profit Before Tax (PBT) of JKH was at Rs. 558 million in the third quarter of 2015/16 which is an increase of 48 per cent over the third quarter of the previous financial year (2014/15 Q3: Rs. 376 million, according to JKH’s quarterly statement.
“The improved performance is mainly on account of the revenue recognised, post the final tranches received as at 31 December 2015, at the “7th Sense” residential development project. The construction of Cinnamon Life is in progress with pre-sales of both the residential and commercial space continuing to be encouraging,” JKH Chairman Susantha Ratnayake has said in his statement. The Group PBT in the third quarter of the financial year 2015/16 at Rs. 5.30 billion is 1 per cent below the PBT of Rs. 5.37 billion which included capital gains of Rs. 610 million, recorded in the corresponding period of the previous year. The Group PBT for the first nine months of the financial year 2015/16 at Rs. 13.13 billion, is an increase of 9 per cent over the PBT of Rs. 12.04 billion, which included capital gains of Rs. 999 million, recorded in the same period of the previous financial year.
Excluding the impact of the aforementioned capital gains, the adjusted Group PBT for the quarter and the first nine months are an increase of 11 per cent and 19 per cent, respectively, above the corresponding periods in the previous financial year, Mr. Ratnayake has said. The revenue recorded the quarter at Rs. 24.71 billion is marginally below the Rs. 24.77 billion recorded in the corresponding period of the previous financial year, mainly due to Union Assurance General Limited being classified as an associate company from January 2015 onwards and the steep reduction in global oil prices which impacted the Bunkering business.
“The Company’s PBT for the third of 2015/16 at Rs. 2.67 billion is an increase of 14 per cent over the Rs. 2.33 billion recorded in the corresponding period of 2014/15. The Company PBT for the first nine months of the financial year 2015/16 at Rs. 10.84 billion, inclusive of a capital gain of Rs. 3.10 billion arising from the share repurchase of Union Assurance PLC, is an increase of 70 per cent over the previous financial year,” Mr. Ratnayake has said.