Jetwing Symphony revenues register strong growth, operating profits robust

Jetwing Symphony PLC registered a strong growth in revenues and operating profit for the July-September quarter (2Q19)—an indication that the hotel chain catering to a niche luxury market is being well received by the traveller, both local and foreign. 

Jetwing Symphony, which runs five luxury resorts, reported 36 percent year-on-year (YoY) increase in revenues to Rs.520.4 million during the three months to September with operating profit rising by 82 percent YoY to Rs.194.3 million. 

However the company is yet to turn a net profit as the operating costs and heavy finance costs are weighing on the bottom line. Hefty foreign currency conversion losses also hit the profits during the quarter under review. The company’s share was trading at Rs.12.10, down 90 cents on Friday. 

The company owns and runs five luxury properties in Yala, Dambulla, Kaduruketha, Pottuvil and Colombo Seven. Two other luxury resorts in Kandy and Uppuveli are to be launched shortly.

Given the solid and consistent growth in revenues among the company’s portfolio of resorts, it’s likely that the company will turn a net profit during the next fiscal year.
The company said its earnings before interest and tax growth or the growth in the operating profits was primarily fuelled by an increase in the ARR across all operating hotels with Jetwing Kaduruketha recording the highest growth of 82 percent from the previous quarter. 

“This is in line with the group’s positioning of Jetwing Kaduruketha as a leading luxury eco-resort in Sri Lanka. Jetwing Surf and Jetwing Kaduruketha recorded profits for the quarter while the other properties performed below breakeven, primarily due to foreign exchange losses with significant depreciation of the rupee against the US dollar,” a Jetwing Symphony statement said.  “Jetwing Surf (in Pottuvil), the group’s newest venture recorded after tax profit of Rs.6 million for the quarter ended September 30, 2018 despite being in operation for less than a year, further cementing Jetwing’s position as a celebrated hospitality provider”, it added. 

Jetwing Symphony Chairman Hiran Cooray said he remains positive of the future prospects of Sri Lanka’s hospitality sector.

“With Sri Lanka’s destination marketing campaign to be launched shortly, we are confident in the long-term growth prospect of the tourism industry in Sri Lanka, and we believe that we are well positioned to reap the benefits from the next growth wave in tourism. 

With an ever expanding portfolio and a focus on new initiatives for regional expansion, we believe that the Symphony group is firmly rooted in a foundation set for multi-dimensional growth,” Cooray said. 

Meanwhile the company reported 16 cents a share or Rs.81.7 million in net losses for the three months ended September 30, 2018 compared to Rs.72.9 million net loss reported for the corresponding quarter in 2017. 

An exchange loss of Rs. 83.4 million was incurred during the period from conversion of a foreign currency loan. Jetwing Symphony carried out a group-wide cost controlling exercise during the first six months which paid results. Meanwhile, for the first half of the fiscal year, the company reported a loss per share of 47 cents or Rs.236.9 million net loss compared to a net loss of Rs.233. 1 million in the corresponding period  last year. 

The revenue for the period was Rs.819 million, up 26 percent YoY.  Jetwing Symphony Limited went public in December 2017 offering 50.2 million shares or 10 percent stake in the company for a consideration of Rs.753.3 million.

Employees’ Provident Fund holds 7.06 percent stake in the company being the fourth largest shareholder.