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4Q15 net up 12% helped by gains from insurance sale

John Keells Holdings PLC (JKH), the company with the highest market capitalization in the Colombo bourse, said its consolidated net profit for the year ended March 31, 2015 (FY15) rose 22 percent year-on-year (yoy) to Rs.14.3 billion amid net finance income surging 64 percent yoy to Rs.7.45 billion.  
In 2013, JKH announced a whopping Rs.40 billion cash call on a staggered basis through a rights issue attached with warrants to part finance its flagship integrated resort, the ‘Waterfront Project’.

However, the new government elected in January said it won’t allow gaming activities in the ‘Waterfront Project’ and two other such faculties. JKH said it would ‘engage’ the government in this regard.

JKH said it would go ahead with the project sans the gaming facilities, as the multi-faceted nature of the project makes it still viable.
The basic earnings per share for the year improved Rs.14.44 from Rs.12.61.

The revenue for the year rose 6 percent to Rs.91.5 billion and cost of sales also increased at the same pace to Rs.66.2 billion.

The other operating income rose 23 percent yoy to Rs.3.07 billion. During the final quarter, JKH’s insurance subsidiary Union Assurance PLC sold a part of its general insurance business to a foreign party.

The operating profits increased 18 percent yoy to Rs.12 billion.

 For the final quarter (4Q15), the net profit increased only 12 percent yoy to Rs.5.22 billion, with net finance income falling 9 percent yoy to Rs.1.32 billion amid lower interest rates prevailing since 2015 beginning.

Both revenue and costs for the quarter under review remained flat at Rs.22.6 billion and Rs.15.9 billion respectively.

Other operating income rose 37 percent yoy to Rs.1.8 billion, reflecting gains from the insurance sale.

The operating profit for the quarter rose 22 percent yoy to Rs.5.37 billion.

The basic earnings per share for the quarter improved to Rs.5.24 from Rs.4.73.

The post-tax profit of the group’s transportation and logistics business in FY15 fell slightly to Rs.2.33 billion from Rs.2.45 billion in the previous year with segment’s revenue falling to Rs.13.56 billion from Rs.14.61 billion.

The leisure segment’s post-tax profit remained flat at Rs.4.8 billion compared with the previous year, despite revenue increasing to Rs.23.2 billion from Rs.22.5 billion.

The post-tax profit of the property segment improved to Rs.1.42 billion from Rs.1.29 billion. The revenue increased to Rs.5.68 billion from Rs.4.17 billion.  The consumer foods and retail segment of the group came up with an impressive performance for the year, with post-tax profit rising to Rs.1.8 billion from Rs.1 billion in the previous year. The revenue of the segment rose to Rs.29.7 billion from Rs.25.4 billion.

 The group’s financial sector business almost doubled its post-tax profit to Rs.3 billion, despite revenue declining to Rs.9 billion from Rs.9.47 billion.

 The information technology segment’s post-tax profit improved marginally to Rs.279.5 million. The revenue fell slightly to Rs.7.38 billion.

 Other, which included the plantation companies of the group reported a post-tax profit of Rs.2 billion against Rs.1.5 billion in the previous year. The segment’s revenue however fell to Rs.3.46 billion from Rs.3.65 billion.

 As at March 31, 2015, S.E. Captain was the single largest shareholder of JKH with 12.8 percent, followed by Broga Hill Investments Limited with 10.4 percent stake.  Paints & General Industries Limited, a company controlled by the Captain family featured as the third largest shareholder with a 6.6 percent stake.
 Harry Jayawardena controlled Melstacorp Private Limited with 3.7 percent stake was the fourth largest shareholder of JKH.