JKH Chief upbeat on SL outlook

Chairperson Krishan Balendra

• Says macroeconomic stability and IMF reforms strengthen medium-term growth prospects
• Group expanding capacity across ports, food, retail and property despite geopolitical headwinds
• Sees tourism recovering as bookings improve and City of Dreams ramps up operations
• New investments in QSRs, logistics and EV infrastructure position businesses for next growth phase

John Keells Holdings PLC (JKH) Chairperson Krishan Balendra said Sri Lanka’s improving macroeconomic fundamentals and continued progress on economic reforms are creating conditions for medium-term growth, with the Group continuing to invest across key sectors despite disruptions arising from the conflict in the Middle East.

Reviewing the Group’s first quarter performance, Balendra said macroeconomic stability, resilient domestic demand, and continued implementation of the International Monetary Fund (IMF)-supported reform program had helped sustain business and consumer confidence, providing a favourable operating environment across several of the Group’s businesses.

While acknowledging higher energy costs, logistics disruptions, and weaker regional travel arising from the Middle East conflict, he said the broader economic impact on Sri Lanka had remained manageable and the Group continued to position its businesses for long-term growth.

Balendra said the Transportation business illustrated the opportunities emerging from regional supply chain shifts. Lanka Marine Services benefitted from stronger bunkering demand linked to disruptions in global shipping routes, while the Colombo West International Terminal continued to exceed planned throughput as additional capacity at Port of Colombo was rapidly absorbed by market demand.

He said the Terminal had effectively reached full utilisation of its first-phase capacity, with completion of the full development remaining on schedule for December 2026. Additional equipment and infrastructure being commissioned during the second half of the year are expected to lift capacity further while improving operational efficiency. 

Balendra said the Group also continued to broaden its consumer portfolio, announcing its entry into Sri Lanka’s organised quick service restaurant (QSR) market through the Wendy’s franchise. The first outlet is expected to open by December, followed by a phased expansion, reflecting confidence in the sector’s long-term growth potential. 

He said the Supermarket business continued to record growth through higher customer footfall and spending, supported by improvements in fresh food, prepared meals, and product availability. The Keells network expanded to 150 outlets during the quarter, with additional locations already identified for development. 

Balendra said demand for new energy vehicles (NEVs) had normalised following the release of pent-up demand last year, with customers increasingly shifting towards mid-priced electric vehicles (EVs). Despite the change in the product mix, the business maintained a strong order pipeline of more than 2,200 vehicles while continuing to expand charging infrastructure and after-sales capacity across the country. 

Although geopolitical tensions affected tourism during the quarter, Balendra said recent booking trends pointed to improving momentum.

He said City of Dreams Sri Lanka continued to ramp up operations following the opening of its integrated resort, with the Cinnamon Life hotel receiving positive market acceptance and international conferences and events supporting future demand. The casino also continued to record progressively stronger operating performance, while the Group expects the project to become an increasingly important earnings contributor as operations mature. 

Within the Property sector, Balendra said residential projects continued to attract buyer interest. Sales momentum remained positive at VIMAN and TRI-ZEN, while the newly launched Vauxhall DSTRCT development had secured more than 100 sale and purchase agreements during its initial marketing phase. Construction is expected to commence during the third quarter of the financial year. 

Balendra also highlighted continued momentum in Financial Services, where Nations Trust Bank benefitted from the integration of The Hongkong and Shanghai Banking Corporation (HSBC) Sri Lanka’s retail banking franchise, while Union Assurance recorded growth driven by higher premium income and investment returns. 

Despite near-term geopolitical uncertainty, Balendra said Sri Lanka remained well positioned to benefit from regional trade and travel growth over the medium term, supported by structural reforms, improving economic fundamentals, and continued investment across the Group’s portfolio.