JKH suffers pre-tax loss in crisis-hit 1stQ 2020
View(s):John Keells Holdings (JKH), like most conglomerates, has suffered badly by the impact of the COVID-19 pandemic with its first quarter pre-tax profit (PBT) results (April to June 2020) showing a loss of Rs.2.43 billion compared to a PBT of Rs.1.36 billion recorded in the previous financial year, a reflection of the crisis facing Sri Lanka’s business community.
Releasing its results on Wednesday, the group said that revenue at Rs.21.60 billion for the period under review, was a decrease of 32 per cent over the Rs.31.74 billion recorded in the previous financial year. Group earnings before interest, tax, depreciation and amortisation (EBITDA) at Rs.802 million in the first quarter of the financial year 2020/21 was a decrease of 78 per cent over the EBITDA of Rs.3.57 billion recorded in the previous financial year.
However JKH said that after the strict lockdown measures, the underlying month-on-month performance of the Transportation, Consumer Foods, Retail and Financial Services businesses, displayed a faster than anticipated recovery momentum reaching almost pre COVID-19 levels.
“The proactive cost containment and productivity improvement measures undertaken to strengthen the group’s financial and cash position from the beginning of the quarter, combined with the recovery momentum in business activity, enabled the group to record cash profits despite the extremely challenging operating conditions,” the company statement said.
It said the group’s leisure business was significantly impacted during the quarter given the suspension of operations of its hotels in April and May on account of the closure of the airports in Sri Lanka and the Maldives and the lockdown measures in Sri Lanka. “While bookings for the next few weeks are low, we are encouraged by strong forward bookings for the peak season of January to April 2021, exceeding the bookings we had for the same time last year. Whilst Sri Lanka is yet to re-open its airport, our hotels in Sri Lanka have now commenced operations where the recovery of domestic tourism has been encouraging,” the statement said.
The Consumer Foods businesses displayed a faster than expected recovery in volumes post the easing of the lockdown in May. In the month of June, the Frozen Confectionery and Convenience Foods recorded positive volume growth whilst the Beverage business recorded a low single digit decline.
The group’s bunkering business, Lanka Marine Services, recorded an increase in profitability driven by improved margins despite a reduction in the overall market volumes due to lower throughput in the Port of Colombo.