John Keells Holdings (JKH) yesterday announced double digit growth in its bottom line for the first quarter of FY15 though revenues managed to grow by only 7%.

JKH said its Group Profit Before Tax (PBT) for the first quarter of the financial year 2014/15 at Rs. 3.06 billion was an increase of 39% over the PBT of Rs. 2.20 billion recorded in the corresponding period of the previous financial year.
The profit attributable to the equity holders of the parent for the first quarter of the financial year 2014/15 at Rs. 2.15 billion reflects a 35% increase over the previous financial year. JKH also benefitted from net finance income rising by 87% to Rs. 1.98 billion whilst the Group enjoyed a Rs. 389 million capital gain via the sale of a stake in Expolanka Holdings Plc.
The revenue for the first quarter of the financial year 2014/15 of Rs. 21.28 billion was an increase of 7% over the Rs. 19.86 billion recorded during the same period last year.
Company PBT for the first quarter of the financial year 2014/15 at Rs. 2.96 billion was an increase of 31% over the PBT of Rs. 2.27 billion recorded during the same period last year.
Following is a snapshot of segmental performance in the review of JKH Chairman Susantha Ratnayake.

Transportation: The Transportation industry group PBT of Rs. 529 million in the first quarter of 2014/15 was a decrease of 29% over the first quarter of the previous financial year [2013/14 Q1: Rs. 748 million]. The decline in PBT is mainly attributed to the lower contribution from the bunkering business due to significant reductions in margins consequent to an increase in the number of active suppliers in Colombo. The port business too experienced a reduction in volumes compared to the first quarter of the previous financial year, following the realignment of services as discussed in my previous messages. However, the volumes are expected to stabilise from here on. Both DHL Keells and Maersk Lanka witnessed an improved performance compared to the corresponding period of the last financial year due to growth in the active customer base and higher volumes.
Leisure: The Leisure industry group PBT of Rs.659 million in the first quarter of 2014/15 was an increase of 43% over the first quarter of the previous financial year [2013/14 Q1: Rs. 461 million]. The Sri Lankan Resorts sector experienced an improvement in occupancies across all its properties, aided by the 24% increase in tourist arrivals compared to the corresponding period in the previous financial year. The Maldivian Resorts sector witnessed an improved performance primarily due to achievement of higher average room rates. The destination management business had a breakthrough in the Chinese market by initiating a weekly charter which commenced in July.
Property: The Property industry group PBT of Rs.218 million in the first quarter of 2014/15 was an increase of 53% over the first quarter of the previous financial year [2013/14 Q1: Rs.142 million]. The growth in PBT is mainly on account of the revenue recognition cycle of the ‘OnThree20’ development. The demand for residential apartments, predominantly luxury condominiums, remained steady in the quarter under review, with both ‘7th Sense’ on Gregory’s Road and ‘OnThree20’ selling 80% and 92% of apartment units to-date respectively. The construction of the ‘Waterfront Project’ is in progress with piling work commencing in the quarter under review. The pre-sales in both residential and commercial spaces have been encouraging.
Consumer Foods and Retail: The Consumer Foods and Retail industry group PBT of Rs.472 million in the first quarter of 2014/15 was an increase of 89% over the first quarter of the previous financial year [2013/14 Q1: Rs.249 million]. Both the frozen confectionery and the beverage businesses recorded encouraging results compared to the corresponding period of the previous financial year. The improved performance was mainly attributed to increased volumes on account of positive consumer sentiment and the evolving product offerings. Keells Food Products witnessed an increase in volumes and profitability and the overall performance was in line with expectations. The Retail sector recorded a better quarter compared to the previous year, driven by an increase in same store sales growth and a notable contribution from the newly opened outlets.
Financial Services: The Financial Services industry group PBT of Rs.332 million in the first quarter of 2014/15 was an increase of 28% over the first quarter of the previous financial year [2013/14 Q1: Rs. 259 million]. The improved performance is attributed to the Banking and Insurance verticals of the industry group. Increased focus on managing non-performing loans and other operational costs helped Nations Trust Bank to overcome the impact of subdued credit growth witnessed throughout the banking industry. The performance of Union Assurance was in line with expectations, with the general insurance business focusing on containing underwriting losses towards minimising the negative impact on overall profitability, whilst the life business focused on enhancing market share. The Stock Broking arm of the Group witnessed a decline in profitability compared to the first quarter of the previous financial year. However, this trend is expected to reverse with the improved trading volumes witnessed recently on the Colombo Stock Exchange driven by higher local high net worth and retail participation.
Information Technology: The Information Technology industry group PBT of Rs.21 million in the first quarter of 2014/15 was a decrease of 67% over the first quarter of the previous financial year [2013/14 Q1: Rs.65 million]. The lower PBT is mainly attributable to the divestment of the Group’s stake in Information Systems Associates (ISA) in the last quarter of the previous financial year and the resulting discontinuation of its profit contribution to the industry group. The office automation business benefitted from the improved profitability of the mobile phone and photo copier lines. Despite increased volumes from clients in North America, the profitability of the Business Process Outsourcing (BPO) operations was negatively impacted by the exchange loss arising from the appreciation of the Indian Rupee in the quarter under review.
Other, Including Plantations: Other, including Plantation Service and the Corporate Centre recorded a PBT of Rs.826 million in the first quarter of 2014/15, which was an increase of 200% over the first quarter of the previous financial year [2013/14 Q1: Rs. 275 million]. The improved performance is mainly on account of John Keells Capital disposing of its stake in Expolanka Holdings PLC which resulted in a capital gain of Rs. 389 million. Plantation Service also recorded a better performance compared to the previous year.

Source: http://www.ft.lk/2014/07/25/jkh-1q-bottom-line-enjoys-double-digit-growth/