JKH city hotels and real estate arm sees 17% profit decline in 1Q

Asian Hotels and Properties (AHPL), the city hotel and real estate management arm of the John Keells group, posted a net profit of Rs.280.12 million for its first quarter ended June 30, 2017 (1Q18), which was a 17 percent Year-on-Year (YoY) fall, due to escalating costs of services provided at its hotels. Earnings per share for the quarter fell to 63 cents from 77 cents YoY. Revenue remained flat YoY at Rs.1.92 billion, while cost of sales increased 6 percent YoY to Rs. 871.70 million.

Operating income fell 20 percent YoY to Rs. 336.05 million, while net finance income increased to Rs.49.97 million from Rs. 28.48 million YoY. There were no major changes in the balance sheet. The total asset base of the firm fell to Rs. 38.50 billion from Rs. 39.19 billion at the start of the financial year. In its operating segments, the two 5-star city hotels of AHPL, Cinnamon Grand and Cinnamon Lakeside, posted a profit after tax of Rs. 241.18 million, down from Rs. 323.18 million YoY. 

The segment revenue increased to Rs.1.82 billion from Rs.1.81 billion, while operating profits were down to Rs. 425.03 million from Rs. 460.04 million YoY. In its property segment, the firm posted a Rs.79.01 million profit after tax, up from Rs. 66.87 million YoY. The segment revenue increased to Rs. 103.06 million from Rs. 101.75 million YoY, while operating profits increased to Rs.83.08 million from Rs. 68.98 million YoY.

As at June 30, John Keells Holdings PLC held 78.56 percent of shares in AHPL, while the state-controlled Employees’ Provident Fund held 10.22 percent.