|
|
 |
 |
| Sunday, 1 February 2004 |
 |
|
 |
Business |  |
| News Business Features Editorial
|
JKH continues on growth path John Keells Holdings (JKH) continued the exceptional performances of the previous two quarters, and the last financial year, in recording a 24 per cent increase in Revenues, a 77 per cent growth in Group Operating Profits and a 68 per cent increase in pre-tax profits, prior to exceptional items, over the corresponding period, in the third quarter of 2003/2004, a quarter that started with much optimism and buoyancy with heightened levels of external trade and tourism, but ended rather depressingly as the constitutional crisis dragged on, unresolved. The revenues and group operating profit for the nine months ended December 31, 2003 were higher than the corresponding period in 2002/2003 by 26 per cent and 86 per cent respectively while the pre-tax profits prior to exceptional items during the same period at just below the symbolic two billion rupee mark, was 73 per cent over the corresponding period last year, Chairman, JKH, Vivendra Lintotawela said in a news release. The profit attributable to the group in the quarter was 48 per cent higher than the corresponding quarter of 2002/2003 while the one billion rupee profit attributable to the group for the nine months ended December 31, 2003, after totally absorbing a Rs. 756 million voluntary retirement cost and enjoying a profit of Rs. 46 million from discontinued operations, was 19 per cent higher than that of the corresponding period in 2002/2003 which also enjoyed a Rs. 103 million exceptional profit from discontinued operations. The JKH pre-tax profits for the quarter and nine months ended December 31, 2003 were 77 per cent and 103 per cent over the corresponding periods in 2002/2003. JKH successfully concluded a private share placement and a 1 for 7 Rights issue during the quarter, raising Rs. 6.1 billion, he said. The Food and Beverage Sector, though performing below expectations during the quarter, maintained a year-to-date level of profitability similar to that of the previous year. The full effects of the Voluntary Retirement Scheme (VRS) did not take root as a result of sluggish volume growth in the core soft drinks segment. While the efforts to entrench the Elephant House brand in the supermarket segment continued, Keells Food Products and Keells Restaurants performed well during the quarter as consumer preference towards convenience became more evident. South Asia Gateway Terminals (SAGT) and Lanka Marine Services (LMS), despite incurring a Rs. 69 million VRS cost, have been the key contributors towards the profit growth in the Transportation Sector. Amidst increasing competitive pressure, SAGT, with an enhanced capacity of 1.2 million TEU, performed commendably during the quarter while LMS benefited from a pick-up in overall activity at the Port of Colombo. According to the release, the Plantation Sector registered a good performance in the quarter. Tea Small Holders, Kegalle Plantations and Namunukula profitability is significantly better than last year. Concerted focus on quality, aided by strong rubber prices and improved prices in low grown teas were the main factors behind this showing. With tourist arrivals to the country exceeding the 500,000 mark, and expected to grow even further, new horizons have been defined for our Leisure sector. Our overall offering in this sector was significantly enhanced by the addition of two top city hotels, the Colombo Plaza and the Trans Asia, to our existing portfolio of resorts and destination management companies. Sector profits during the quarter increased significantly over the corresponding period last year. The destination management companies, while taking advantage of the overall improvements in the leisure scenario, are well poised, as a result of renewed capacities and capabilities, to provide a more customer focused and value added service. The Real Estate Sector has reaped immediate benefits with high returns from Crescat Development Ltd. If the economy does not suffer too greatly as a result of the current political impasse, the immediate prospects in this Sector are significant with the availability of prime land for development. The Information Technology Sector has still not reaped its full potential. Although the profits recorded during the quarter were reasonable, mainly as a result of contributions from the Office Automation, Systems and Networking businesses, the contribution from the Software Business has been below expectations. The Financial Services Sector continued to maintain the rapid growth momentum, which commenced last year. John Keells Stock Brokers was the major contributor towards this success, generating strong returns and maintaining its rank as a leading stockbroker in the industry. Nations Trust Bank, which successfully launched its American Express credit card operations during the last quarter, performed well while Union Assurance also contributed reasonably to the sector's profit growth, the release said. The recent political evolvements and the resultant uncertainties surrounding the ceasefire and the continuation of the peace process have undoubtedly caused a dip in the level of overall business confidence and should the issues in contention be allowed to remain unresolved for much longer, the medium and long-term economic prospects could suffer serious damage. While the Group wishes to maintain an apolitical stance, it is hopeful that the parties involved would reach a sustainable settlement in the best interest of the nation," Lintotawela said. |
|
News | Business | Features
| Editorial | Security Produced by Lake House |
