Strong performance in Q3 as JKH Group EBITDA grows by 126% to Rs.9.53 billion; significant turnaround in the Group’s Leisure business

Summarised below are the key operational and financial highlights of our performance during the quarter under review:

• Group EBITDA recorded a significant increase of 126 per cent to Rs.9.53 billion during the quarter under review against the comparative period [2020/21 Q3: Rs.4.21 billion].
• The Group’s businesses recorded strong growth in profitability compared to the third quarter of the previous year on the back of a fast recovery momentum with most of the businesses reaching pre COVID-19 levels post the easing of restrictions.
• The Leisure industry group, in particular, recorded a significant turnaround in performance with the Q3 2021/22 EBITDA at Rs.1.23 billion compared to a negative Rs.1.01 billion in the corresponding quarter of the previous year. This turnaround has continued in the month of January 2022 and a strong recovery is expected in the coming months.
• The Maldivian Resorts segment continued its encouraging recovery momentum where the occupancy at our hotels were at pre-pandemic levels during the quarter whilst the Colombo Hotels and Sri Lankan Resorts segments recorded a positive EBITDA in the month of December 2021 on the back of easing of restrictions from October 2021 onwards.
• The Consumer Foods industry group continued its strong recovery momentum with all segments recording strong double-digit growth in volumes during the quarter, with volumes of the Beverages and Frozen Confectionery businesses reaching pre-pandemic levels.
• The Retail industry group recorded an encouraging performance with same store sales growth driving profitability in the Supermarket business, whilst the mobile phones business recorded a strong increase in volumes and profitability.
• The residential and commercial components of the ‘Cinnamon Life’ project are now completed, with the second residential apartment tower ‘The Residence at Cinnamon Life’, ready for customer handover from February 2022 onwards.
• The USD 395 million loan at ‘Cinnamon Life’, which was due for repayment by July 2022, was refinanced in December 2021 through a syndicated facility during the quarter under review. The new facility comprises of a USD 225 million long term loan component and a USD 100 million bridging facility for a six-month period to align with the maturity date of July 2022 under the original facility.
• A private placement of JKH shares of the LKR equivalent of USD 80 million to Asian Development Bank (ADB) was approved by shareholders in December. The first phase of the transaction amounting to USD 50 million was received on 19 January 2022.
• Colombo West International Container Terminal (Private) Limited (CWIT), the project company for the development of the West Container Terminal-1 (WCT-1) in the Port of Colombo, is in the final stages of fulfilling the conditions precedent in the Build, Operate and Transfer (BOT) agreement, and the handover of the site for the commencement of construction is expected to take place in the ensuing quarter.
• Initiatives for the quarter by ONE JKH, the Diversity, Equity, and Inclusion (DE&I) brand of the John Keells Group, included the enhancement of employer supported childcare with an additional creche location being introduced to staff and the presentation of the inaugural Chairperson’s Award for DE&I at the 2021 annual awards ceremony.
• The Group’s carbon footprint per million rupees of revenue decreased by 15 per cent to 0.50 MT while the water withdrawal per million rupees of revenue decreased by 11 per cent to 9.68 cubic meters.