Revenues fell by 2 % to Rs. 41.02 billion and post-tax profit dropped by 4% to Rs. 6.30 billion at image-hit John Keells Holdings (JKH) in the year ending 31 March 2009 but the company says it’s positive about the future after the end of nearly three decades of conflict.
The image of the group took a severe beating which was reflected in the company stock falling sharply in the stockmarket after it was criticised by the Supreme Court in the LMS privatisation case. The stock regained subsequently and is now trading at over Rs 100 – after dropping to Rs 60 per share.
JKH Chairman Susantha Ratnayake, in a message to shareholders, said he was confident that the end of the conflict provides a era of unprecedented opportunity for Sri Lanka, its people and the company. “We, for our part, stand ready to play a meaningful role in this regard. Economic meltdown; global recession; sub-prime crisis; terms not heard of in the recent past, and in some cases, never before, made the headlines impacting the business environment globally,” he said.
Taking all these difficulties plus the result of the Supreme Court judgement on LMS, he said 2008/09 was probably the most trying year that the John Keells group has faced in its history.
The annual report said transportation was the main contributor to the group with after-tax profit at Rs 1.67 billion but lower that last year’s Rs 2.90 billion. Leisure profits fell by 63 %, property profits dropped by 38 %, Consumer Foods & Retail industry group saw a decline of 51 % while Financial Services reported an increase of 16% in profits. Plantation Services profits also fell by 36%.
Mr Ratnayake said the one-off gains from the sale of the Associated Motorways (AMW) stake and the negative goodwill write back on the Union Assurance (UA) acquisition was more than offset by the one-off charges consequent to the LMS judgement and the reduced profitability, relative to previous years, arising from the change in the operating model of the business.
“As we begin a new financial year, the global economic outlook remains weak with limited visibility and there is continuing volatility, albeit at a lower level of intensity when compared to that which prevailed in the second half of the previous year, in the currency, interest rates and stock markets,” the JKH Chairman said.
He said the promise of peace offers untold opportunity for the corporate sector, the group and some specific sectors such as tourism, consumer products and services, trade, logistics and property development, these being businesses which have been particularly affected to varying degrees by the years of conflict. |
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