JKH records EBITDA of Rs.8.09 billion in Q2 2024/25; Cinnamon Life welcomes guests from October

*EBITDA includes interest income and the share of results of equity accounted investees which is based on the share of profit after tax but excludes all impacts from foreign currency exchange gains and losses (other than for equity accounted associates), to demonstrate the underlying cash operational performance of businesses.
 



 
Summarised below are the key operational and financial highlights of our performance during the quarter under review:

• Group EBITDA at Rs.8.09 billion in the second quarter of the financial year 2024/25 is a decrease of 4% against Group EBITDA of Rs.8.42 billion recorded in the previous financial year. Group EBITDA for the quarter under review includes substantial pre-opening costs pertaining to the ramp-up associated with the opening of the ‘Cinnamon Life’ hotel at the ‘City of Dreams Sri Lanka’. Excluding ‘City of Dreams Sri Lanka’, Group EBITDA for the second quarter of 2024/25 recorded an increase of 8% to Rs.9.28 billion [2023/24 Q2: Rs.8.62 billion].
• Post the conclusion of the Presidential elections, Sri Lanka’s stability and recovery momentum has been sustained with business and consumer confidence, and the markets, rebounding as seen from the relevant indices and indicators. The progress on the international sovereign bond restructuring programme, which is essential for Sri Lanka’s macroeconomic stability, is encouraging. Upon the execution of the relevant documentation reflecting such agreements, the sovereign credit rating is expected to witness an upgrade from the current ‘default’ status in the coming months.
• The 687-key ‘Cinnamon Life’ hotel, restaurants and banquet facilities commenced operations on 15 October 2024. While operations have commenced and continued for only a few weeks, the feedback received to date from our customers have exceeded expectations. Fit-out works relating to the remainder of the project comprising of the 113-key ‘Nuwa’ hotel and gaming operations are progressing well and expected to be operational along with the retail mall, with overall completion of these elements scheduled for mid-CY2025.
• In July 2024, the Company announced a Rights Issue of Ordinary Shares, followed by a Sub-division of Ordinary Shares. The Company raised Rs.24,042,175,200/- through the Rights Issue of 150,263,595 new Ordinary Shares at an issue price of Rs.160/- per share. The Rights Issue was oversubscribed, and the new Ordinary Shares allotted from the Rights Issue were listed on 22 October 2024.
• The Sub-division of Ordinary Shares in the ratio of one (1) existing share post the Rights Issue into ten (10) Ordinary Shares will be completed, with recommencement of the trading of shares on 6 November 2024. Upon the completion of the Sub-division of shares, the total number of shares in the Company will be 16,528,995,520.
• The construction and installation works on the West Container Terminal (WCT-1) at the Port of Colombo is progressing well. The first batch of quay and yard cranes arrived in September 2024, following which the commissioning is expected to be completed by the third quarter of 2024/25. The first phase of the terminal is slated to be operational in the fourth quarter of 2024/25.
• The Transportation industry group recorded an increase in profitability, driven by both the Group’s Ports and Shipping business and the Bunkering business.
• Both the Beverages (carbonated soft drinks segment) and the Frozen Confectionery businesses recorded an increase in EBITDA driven by a significant growth in margins and volumes.
• The Supermarket business recorded a strong performance during the quarter, with same store sales recording encouraging growth of 14%, driven by customer footfall growth of 12%, resulting in growth in profitability and margins.
• The performance of the Leisure industry group was impacted by the pre-opening costs pertaining to the ‘Cinnamon Life’ hotel, together with the decline in profitability mainly attributable to the Maldivian Resorts due to the translation impact of a stronger Rupee as compared to the corresponding period in the previous financial year.
• The Property industry group recorded a growth in profitability driven by profit recognition from residential apartment unit sales at ‘City of Dreams Sri Lanka’, real estate sales in Digana, through Rajawella Holdings (Private) Limited, and revenue recognition at the ‘TRI-ZEN’ residential project.
• Nations Trust Bank PLC recorded a strong growth in profitability aided by loan growth, higher fee income and lower impairment while Union Assurance PLC recorded encouraging double-digit growth in gross written premiums, driven by renewal premiums and regular new business premiums.
• The Group’s carbon footprint per million rupees of revenue decreased by 11% to 0.38 MT, and the water withdrawal per million rupees of revenue decreased by 26% to 6.79 cubic meters when compared to the corresponding quarter of the previous year.