Jumbo profit at JKH
Sri Lanka’s premier blue chip John Keells Holdings (JKH) has reinforced its supremacy by achieving the highest-ever profit by a listed corporate with the just-concluded 2011/12 financial year, producing its best-ever and most phenomenal performance.
As per provisional results released for the year ended on 31 March 2012, JKH’s recurring profit attributable to equity holders jumped by 40% to Rs. 8.36 billion whilst overall bottom line rose by 19% to Rs. 9.7 billion. Recurring Group profit before tax had risen by 37% to Rs. 11.5 billion whilst the overall Group profit before tax was a staggering Rs. 12.91 billion, up by 21% over the FY11 whilst after tax profit topped the Rs. 11 billion mark.
JKH’s bottom line is also the highest beating previous best of Rs. 8.09 billion by Commercial Bank in 2011.
The highest after-tax profit has been Rs. 13 billion by Bukit Darah in FY11. Bukit is yet to announce its FY12 full year results and in the first nine months Bukit had Rs. 11.75 billion in pre-tax and Rs. 9.2 billion in after tax though its bottom line is low at Rs. 3.7 billion (FY11 – Rs. 3.2 b). Carson Cumberbatch FY12 full year results are pending too. In the first nine months its pre-tax profit was Rs. 10.42 billion whilst after tax was Rs. 7.9 billion.
JKH’s phenomenal bottom line was supported by a 27% increase in Group revenue to Rs. 76.70 billion. Furthermore a robust fourth quarter performance had rounded the record year at JKH. Pre-tax profit in the 4Q was Rs. 5.5 billion, up by 67% over a year earlier and after-tax profit rose by 65% to Rs. 4.8 billion with profit attributable to equity holders being Rs. 4.09 billion, also showing a similar increase over the 4Q of FY11. The 4Q results included a Rs. 1.4 billion contribution from the change in fair value of investment property, up by 202% a year earlier. Top line in 4Q was up by 25% to Rs. 22.4 billion.
All business segments of JKH have improved over FY11 with some posting substantial gains. For the first time in recent years, JKH’s leisure business had made the biggest contribution (34%) to the group profit after tax, beating the transportation segment (30%). Leisure industry group saw its PAT rise by 60% to Rs. 3.7 billion, whilst transportation figure was Rs. 3.27 billion, though up by 18% over FY11. In the previous financial year transportation with Rs. 2.78 billion was above leisure’s Rs. 2.3 billion.
Leisure’s revenue in FY12 grew by 23% to Rs. 17.42 billion whilst transportation revenue rose by 23% to Rs. 17.38 billion.
The Property industry group with a revenue of Rs. 3.79 billion and a PAT of Rs. 930 million contributed 5% and 8% respectively to total Group revenue and PAT. The 2011/12 PAT increased by 19% over the previous year.
Consumer Foods and Retail (CF&R) recorded revenues of Rs. 22.02 billion and a PAT of Rs. 2.38 billion, contributing 29% and 21% respectively to Group revenue and PAT. The 2011/12 PAT, which includes a Rs. 1.11 billion investment property revaluation surplus, increased by 932% over the previous year. Recurring PAT increased by 451%.
The Financial Services industry group, with revenues of Rs. 7.93 billion and a PAT of Rs. 1.11 billion contributed 10% to both the Group revenue and PAT. The 2011/12 PAT increased by 29% over the previous year.
The Information Technology industry group posted revenues of Rs. 5.93 billion and a PAT of Rs. 64 million, contributing 8% and 0.6% to Group revenue and PAT respectively. The 2011/12 PAT was a turnaround from the loss made in the previous year.
The Plantation Services sector reported revenues of Rs. 2.22 billion and a PAT of Rs. 146 million, contributing 3% and 1.3% respectively to Group revenue and PAT. In 2011/12, the PAT declined by 49%.
In addition to the Plantation Services sector, Others comprise of the holding company, other investments and land owning companies. These have limited external revenues. Overall, Other, including Plantation Services, reported revenues of Rs. 2.23 billion (primarily from Plantation Services) and a loss after tax of Rs. 392 million (primarily as a result of the exchange loss on the IFC loan following the depreciation of the Rupee against the US Dollar and an increase in the tax expense at the holding company).
JKH Group also continues to maintain a strong balance sheet. This strength is evidenced by a debt to equity of 25.1%, a net debt (cash) to equity of 10.7%, debt to total assets of 15.0% and an interest cover of 20.2 times (previous year 14.4 times). Net cash flow from operating activities increased by 94% to Rs. 16.48 billion.
Return on Capital Employed (ROCE) was 14.9% compared to 14.7% in the previous year whilst Return on Equity (ROE) was 15.0% compared to 15.1% in the previous year
Diluted earnings per share increased by 18% to Rs. 11.49 and cash earnings per share increased by 30% to Rs. 14.68.
JKH also said carbon footprint per Rs. 1 million of revenue decreased by 11% from 1.08 MT to 0.96 MT.
For 2012 FY, JKH has thus far paid Rs. 2 per share via two interim dividends. Last year it paid Rs.3 per share dividend.
Provisional results were announced after the market was closed. In tandem with negative investor sentiments, JKH share price yesterday dropped by Rs. 6.10 to close at Rs. 196 whilst it hit an intra-day low of Rs. 194.20.
