John Keells Holdings Posts Highest Ever Profit After Tax of Rs9.06bn with a Revenue of Rs60.5bn

21st May 2011, www.island.lk

John Keells Holdings (JKH), the diversified conglomerate, has posted the highest ever profit after-tax in the company’s history for the financial year ended March 31,2011 with a group revenue of Rs.60.5 billion, up 26% from a year earlier, and an after-tax profit of Rs.9.06 billion, up 63% from the previous year.

The group’s pre-tax profit was Rs.10.6 billion, with JKH and Dialog Axiata being the only two companies to reach this mark up to now. Analysts said that it was possible that the Carsons group too would achieve this benchmark in the financial year ended March 31, 2011.

In results filed with the Colombo Stock Exchange on Friday, JKH said that Rs.8.25 billion of these earnings translating to earnings per share of Rs.13.24, was attributable to equity holders of the parent.

JKH also announced to the CSE that it would be paying a third interim dividend of Re.1 per share on top of two interim dividends each of Re.1 per share already paid to give shareholders a return of Rs.3 per share for the year under review.

Asked why the company was not increasing its dividend payout in the context of the superior performance, a senior official company said that several projects, many of them with long gestation periods, are being looked at and the directors thought it best that the previous year’s dividend level is maintained.

``Otherwise you raise shareholder expectations that may be difficult to satisfy,’’ he said. ``We had that experience when we paid a special dividend of Rs. 2 per share a couple of years ago and many shareholders believed this would continue.’’

He said that although the dividend level was the same as in the previous year, the company was doing a share sub-division under which every three shares would be sub-divided into four.

"Once the sub-division is done, our share price would necessarily go down but shareholders, in terms of the share price of their increased shareholding, will have a substantial capital appreciation convertible to cash if they so desire," he said.

The Employees Provident Fund has increased its stake in JKH from 5.7% at the end of last year to 7.1% as at March 31, 2011 while the Insurance Corporation too owns 1.8%, same as what it held at the end of last year.

Analysts did not discount the possibility of the state sector seeking a place on the JKH board should the collective holding reach a substantial level of around 15%.

Mr. S.E. Captain remains the biggest individual shareholder of JKH with his personal holding together with those of connected parties topping 20%.

In the year under review, transportation continued to be the biggest cash cow for the group posting a pre-tax profit of Rs.3 billion for the year, up from Rs.2.3 billion a year earlier.

Leisure contributed Rs.2.5 billion, up from the previous year’s Rs.1 billion, financial services Rs.1.3 billion, up from Rs.868 million, property Rs.831 million, up from Rs.378 million, consumer foods and retail Rs.579 million, up from Rs.288 million and IT Rs.114.4 million, up from Rs.13.6 million a year earlier.

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John Keells Group Earns Record Profit of Rs 5.2bn After Tax

01st June 2010, www.dailynews.lk

John Keells Holdings Group revenue increased by 17 percent to Rs 47.98 billion for the year 2009/10 ended March 31, 2010. Group profit before tax (PBT) increased by 4 percent to Rs 6.54 billion. Group profit after tax (PAT) attributable to equity holders increased by 10 percent to Rs 5.20 billion.

Cash EPS increased by 54 percent to Rs 12.04.

Net cash flow from operating activities increased by 136 percent to Rs 9.79 billion. Return on equity was 10.9 percent compared to 10.6 percent in the previous year the JKH Chairman Susantha Ratnayake said.

Transportation remained the main contributor to the Group’s after tax profits, contributing 41 percent to the Group’s profitability with a PAT of Rs 2.28 billion, an increase of 38 percent. The industry group contributed 20 percent to the Group’s revenue.

The group’s profits were mainly driven by the operations of South Asia Gateway Terminals (SAGT), at the Colombo port, where the throughput grew 7 percent year on year to 1.88 million TEUs primarily due to the significant growth in demand from key customers.

Leisure recorded a significantly improved performance with tourist arrivals increasing consequent to the end of hostilities.

Overall, the Leisure industry group contributed 24 percent to the Group’s revenue and 18 percent of the Group’s profitability with a PAT of Rs 973 million, this being a sevenfold increase over 2008/09 [2008/09: Rs 128 million].

In anticipation of a rejuvenated Leisure industry in Sri Lanka, a total of over Rs. 6 billion has already been invested and/or committed by the Group.

The Property industry group contributed 3 percent to the Group’s revenue and 6 percent to the Group’s after tax profitability with Rs 342 million for the year, a 30 percent decline [2008/09: Rs 486 million].

There has been renewed interest in apartments in recent months and we are currently reviewing the plans that were shelved when demand was sluggish and are revisiting our strategy to develop the Group’s substantial land bank in Colombo, Ratnayake said.

The Consumer Foods and Retail industry group contributed 33 percent to the Group’s revenue and 2 percent to the Group’s after tax profitability with Rs 88 million, this being a 28 percent decline compared to the previous year.

The Beverages and Frozen Confectionary businesses recorded a PAT increase of 15 percent due to increased volumes in the North and the East and the Retail business.

Financial Services reported a PAT of Rs 530 million, an increase of 56 percent compared to last year.

Information Technology recorded a PAT of Rs 18 million in the current year compared to the loss of Rs 167 million in the previous financial year.

The industry group contributed 3 percent to the Group’s revenue and 0.3 percent to the Group’s after tax profitability.

Plantation Services, which is included under ‘Other’ in our segment report, recorded a PAT of Rs 275 million which is a 5 percent contribution to the Group’s profitability.

The PAT increase of 56 percent was mainly a result of higher tea and rubber prices in the international markets.

“We also acquired a stake of 24.6 percent in Central Hospital (Private) Limited through John Keells Capital. Overall, the ‘Other’ segment contributed 6 percent to Group revenue and 24 percent to the Group’s profitability, Chairman Ratnayake said.

Image: JKH Chairman, Susantha Ratnayake