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Thursday, July 30, 2009

at Thursday, July 30, 2009 | 1 comments |

John Keells Holdings (JKH) Quarter Ended 30th June 2009





Posted by Sri Lanka Equity Analytics

1 comments:

Sri Lanka Equity Analytics said...

UPDATE 1-S.Lanka's Keells Q1 net down
By Shihar Aneez
COLOMBO, July 30 (Reuters) - John Keells Holdings JKH.CM, Sri Lanka's biggest conglomerate by market value, posted a drop
in its net profit in the first quarter after losing its monopoly in the marine bunkering business, analysts said.

Net profit fell 22 percent to 650.4 million rupees ($5.67 million) in the quarter ended on June 30 and revenue dropped 9 percent, the company's said on Thursday.

"This is due to loss of revenue from its profitable bunkering unit Lanka Marine Services (LMS)," said Channa Amaratunge, director at CT Capital.

The results showed performance in the conglomerate's most profitable sector, transportation, hit a significant low, with
net profit slumping by around 40 percent to 496.3 million rupees in the quarter and revenue plummeting by 58 percent.

"The decline is mainly due to Lanka Marine Services experiencing a decrease in revenue and increased costs from the new operating format," S.C. Ratnayake, the chairman of the company said in a statement.

Analysts said the company has revived its bunkering business plan after losing monopoly due to a court ruling amid stiff competition from seven other players.
Sri Lanka's Supreme Court in July 2008 nullified Keells'
2002 purchase of state-owned oil bunkering assets that became
its profitable LMS division.
The conglomerate said on Sept. 18 a court ruling against the privatisation of LMS could cost it up to $18.84 million, and the total cost from the loss of business was likely to be much more.

The company shares plummeted 60.9 percent last year, mainly due to the court ruling.

"The good sign is its tourism sector has done better than expected and there is a huge potential for the company to perform well with a recovering global economy and the end of the
war," said Danushka Samarasinghe, head of research at Asia Securities.

The conglomerate's tourism division recorded a loss of 50.7 million rupees in the first quarter, compared to a loss of 311.9 million rupees a year ago.

Sri Lanka's tourism industry is expected to perform better after the government ended a 25-year war against Tamil Tiger rebels in May this year.

Shares in John Keells Holdings are up 175 percent so far this year, compared to a 67 percent rise in Colombo Stock Exchange.They closed down 0.2 percent on Thursday.

($1=114.925 Sri Lankan Rupee)
(Editing by Rupert Winchester)

August 1, 2009 at 1:02 PM

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