Post the easing of the strict lockdown measures from mid-May onwards, the underlying month-on month performance of the Transportation, Consumer Foods, Retail and Financial Services businesses, displayed a faster than anticipated recovery momentum reaching almost pre COVID-19 levels for John Keells Holdings PLC.
The proactive cost containment and productivity improvement measures undertaken to strengthen the Group’s financial and cash position from the beginning of the quarter ended 30th June 2020, combined with the recovery momentum in business activity, enabled the Group to record cash profits despite the extremely challenging operating conditions.
Given the faster than anticipated recovery momentum in business activity and the generation of cash profits by the Group, a first interim dividend of Rs.0.50 per share, amounting to a payout of approximately Rs.659 million, was declared to be paid on or before 28 August 2020,Chairman JKH, Krishan Balendra said.
The Group’s Leisure business was significantly impacted during the quarter given the suspension of operations of our hotels in April and May on account of the closure of the airports in Sri Lanka and the Maldives and the lockdown measures in Sri Lanka. The Maldivian airport was opened for arrivals in mid-July.
While bookings for the next few weeks are low, we are encouraged by strong forward bookings for the peak season of January to April 2021, exceeding the bookings we had for the same time last year.
The Consumer Foods businesses displayed a faster than expected recovery in volumes post the easing of the lockdown in May. In the month of June, the Frozen Confectionery and Convenience Foods recorded positive volume growth whilst the Beverage business recorded a low single digit decline. The week-on-week momentum of same store sales of the Supermarket business displayed signs of recovery.
The Group’s Bunkering business, Lanka Marine Services, recorded an increase in profitability driven by improved margins despite a reduction in the overall market volumes due to lower throughput in the Port of Colombo.
Construction resumed at ‘Cinnamon Life’ in mid-May after a 2-month closure and it is encouraging to note that the momentum is gradually reaching pre COVID-19 levels. The profitability of Nations Trust Bank recorded an increase despite pressure on margins, due to the positive impact on account of the removal of the Debt Repayment Levy from January 2020 onwards.
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