|
|
 |
 |
| Sunday, 9 February 2003 |
 |
|
 |
Business |  |
| News Business Features Editorial
|
John Keells records excellent results for 2002/03 The John Keells Group has attributed the relatively improved economic environment, a period devoid of conflict and the group's recent acquisitions as the reasons for its excellent results for the year 2002/2003. "The management is confident that the earnings of Financial Year 2003 will be the best yet for the group. We are committed to continually exceed shareholder expectations," Chairman Vivendra Lintotawela said in a statement issued last week. The group's net earnings increased by 262 per cent for the nine months ended December 31, 2002. Consolidated revenue grew by 39 per cent over the same period of last year. Lintotawela states that "while a strong earnings performance was witnessed in most sectors, the group's bottom line was boosted by contributions from the transportation and food and beverage sectors as well as a turnaround in the leisure sector". Increased rainfall in the last quarter dampened the momentum of the food and beverage sector, which, however maintained a moderate level of growth from the corresponding period of last year. Sales of carbonated beverages were affected by bad weather, but was compensated by the steady growth in demand for ice-creams coupled with improved performances from Keells Food Products and the restaurants. This, coupled with greater labour efficiencies at Ceylon Cold Stores, should boost sector earnings during the rest of the year, he said. The transport sector has more than doubled its pre-tax profits for the nine months. The group's recent acquisition of a 90 per cent stake in Lanka Marine Services (LMS) and the speedy progress made at the South Asia Gateway Terminals have significantly contributed towards this end. "We are confident that steps taken to improve efficiencies at LMS including the initiation of a Voluntary Retirement Scheme would lead to the desired benefits," the Chairman said. The leisure sector has registered a marked turnaround in profitability, albeit from one of the worst quarters for local tourism following the attack on the Colombo Airport and the events of September 11. The Maldivian hotels still account for a bulk of the sector's profits while the contribution of the local segment to growth has been significant. "We are confident of the sector's performance for the rest of the year, based on the present trend in arrivals and feedback from operators. We are continuing to pursue possible regional expansions and review our local tourism portfolio to gain maximum leverage from renewed prospects," he said. Despite higher rubber prices during most of the period under review and a marginal increase in tea, the plantation sector has recorded reduced levels of profitability. It is mainly due to high input costs such as wages and electricity charges. The continued increase in input costs remains a concern for the industry while various initiatives are under way to address the issue. The IT sector has shown a marked improvement compared to the same period of last year. The trend is expected to continue due to focused marketing initiatives and a pick-up in IT spending from the key customers of the group. John Keells Stock Brokers (JKSB) and Nations Trust Bank (NTB), which come under the financial services sector of the group, have witnessed strong growth. JKSB was ranked as the number one broker in terms of brokerage earned for 2002 while NTB's growth, particularly in the last quarter, was boosted by the integration of Waldock Mackenzie and the local operations of American Express Bank. Union Assurance, though still affected by pricing issues and reinsurance costs, has seen an improved performance in the last quarter. Lintotawela stated that although there has been a delay in the revival in external trade, the local economy looks to be on its way to recovery and the group is well positioned to leverage on this. The current peace process has thrust Sri Lanka into international focus and the potential fund flows through aid and investment as well as a possible low interest rate regime augur well for business prospects. While John Keells Holdings has been actively evaluating numerous investment opportunities both locally and overseas, the group remains committed towards continually reviewing its existing operations processes and systems in a bid to maximise organic value generation. The Board has mandated the Boston Consulting Group to take advantage of the new opportunities and improve its operating model in line with global best practices. |
|
News | Business | Features
| Editorial | Security Produced by Lake House |
