Wednesday Jul 29, 2026
Wednesday Jul 29, 2026
Wednesday, 29 July 2026 00:00 - - {{hitsCtrl.values.hits}}
Chairman Krishan Balendra
Sri Lanka’s top blue-chip John Keells Holdings PLC (JKH) yesterday said it posted stronger first-quarter earnings for FY2026/27, with growth led by its transportation, consumer foods, property and financial services businesses, although profitability continued to be affected by foreign exchange losses and weaker tourism due to travel disruptions arising from the Middle East conflict.
Group revenue for the quarter ended 30 June increased 24% to Rs. 141.65 billion from Rs. 114.15 billion a year earlier, while earnings before interest, tax, depreciation and amortisation (EBITDA) rose 26% to Rs. 16.35 billion from Rs. 12.97 billion. Group profit before tax (PBT) increased 31% to Rs. 4.08 billion from Rs. 3.11 billion despite recording a net exchange loss of Rs. 1.89 billion, compared with a loss of Rs. 388 million in the corresponding quarter of the previous financial year.
Chairman Krishan Balendra said the exchange loss mainly reflected the depreciation of the Rupee on the foreign currency-denominated long-term loan at City of Dreams Sri Lanka, amounting to Rs. 3.83 billion. Excluding net exchange losses, Group PBT increased to Rs. 5.97 billion from Rs. 3.49 billion.
Group profit after tax rose 8% to Rs. 773 million from Rs. 717 million despite higher tax expenses arising from increased withholding tax on dividend income. Excluding exchange losses, profit after tax increased to Rs. 2.67 billion from Rs. 1.11 billion.
Profit attributable to equity holders improved to Rs. 62 million from a loss of Rs. 804 million a year earlier, while attributable profit excluding exchange losses increased to Rs. 1.95 billion from a loss of Rs. 418 million. Company PBT rose to Rs. 5.66 billion from Rs. 1.52 billion due to higher dividend receipts.
The Transportation industry group delivered the strongest earnings growth, with EBITDA increasing 223% to Rs. 5.01 billion from Rs. 1.55 billion. Growth was driven primarily by Lanka Marine Services (LMS) and Colombo West International Terminal (CWIT), the project company of the West Container Terminal.
Consumer Foods EBITDA increased 21% to Rs. 1.52 billion from Rs. 1.26 billion, led by the beverages, confectionery and convenience foods businesses. The beverages business recorded 27% volume growth in carbonated soft drinks, while confectionery volumes increased 13%.
JKH also announced its entry into Sri Lanka’s quick-service restaurant segment through the rollout of the Wendy’s brand. Franchise agreements have been completed, with the first outlet expected to open by December 2026 and subsequent expansion to be funded through debt and internally generated funds.
Retail EBITDA declined 16% to Rs. 6.16 billion from Rs. 7.32 billion due to lower profitability at John Keells CG Auto (JKCG), although the supermarket business continued to perform strongly. Supermarket EBITDA increased 16% to Rs. 2.83 billion from Rs. 2.45 billion as same-store sales grew 13%, driven by a 7% increase in average basket value and 6% growth in customer footfall.
The Keells network expanded to 150 outlets after three new stores were opened during the quarter.
JKCG handed over more than 2,400 vehicles during the quarter compared with over 2,300 a year earlier. However, EBITDA declined because a greater proportion of deliveries came from lower-priced vehicle segments despite continued demand.
The company said the BYD ATTO 1 and ATTO 2 accounted for a significant share of sales and that more than 2,200 vehicles remain in the delivery pipeline. JKCG also continued expanding its charging infrastructure, increasing the number of charging stations across the Keells supermarket network to 47 while maintaining 11 showrooms nationwide.
The Leisure industry group recorded a negative EBITDA of Rs. 53 million compared with a negative Rs. 170 million in the corresponding quarter. Excluding City of Dreams Sri Lanka, EBITDA was a negative Rs. 442 million, reflecting weaker performance at the Colombo Hotels, Sri Lankan Resorts and Maldivian Resorts businesses as the Middle East conflict disrupted travel demand.
Leisure PBT declined to a negative Rs. 8.31 billion from a negative Rs. 5.39 billion after recording a Rs. 3.72 billion exchange loss on the US dollar-denominated term loan at Waterfront Properties Ltd, the project company for City of Dreams Sri Lanka, compared with a Rs. 726 million exchange loss a year earlier. Excluding City of Dreams Sri Lanka, Leisure PBT was a negative Rs. 2.46 billion compared with a negative Rs. 1.20 billion previously.
City of Dreams Sri Lanka recorded EBITDA of Rs. 389 million compared with a negative Rs. 1 billion in the first quarter of FY2025/26, reflecting contributions from the Cinnamon Life hotel, Nuwa hotel, casino and mall operations. PBT remained negative at Rs. 5.85 billion compared with a negative Rs. 4.19 billion a year earlier, including depreciation, amortisation and interest expenses of Rs. 2.52 billion compared with Rs. 2.46 billion previously.
JKH said it recognised fixed rental income from the casino, while the variable rental component will commence once operations reach a specified level of performance.
The Property industry group’s EBITDA increased 358% to Rs. 680 million from Rs. 149 million on profit recognition from VIMAN, TRI-ZEN and Cinnamon Life residential projects. During the quarter, two Cinnamon Life residential units were sold, increasing cumulative sales to 345 units.
Financial Services EBITDA increased 9% to Rs. 2.02 billion from Rs. 1.85 billion, led by Nations Trust Bank PLC following the integration of HSBC Sri Lanka’s retail banking franchise from 1 May 2026. Union Assurance PLC also reported double-digit growth in gross written premiums, supported primarily by renewal business and higher investment income.
Balendra said macroeconomic stability, continued progress under the IMF-supported reform program and resilient domestic demand continued to support business confidence despite global uncertainty.
