UR STR NG P INTS John Keells Holdings PLC Interim Condensed Financial Statements Nine months ended 31 December 2018

Transcription

1 UR STR NG P INTS John Keells Holdings PLC Interim Condensed Financial Statements Nine months ended 31 December 2018

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3 Financial Information CHAIRMAN S REVIEW Dear Stakeholder, Strong Group revenue increase of 17 per cent Performance of the Ports and Shipping business, South Asia Gateway Terminals (SAGT), boosts Transportation profitability Frozen Confectionery business seeing growth driven by impulse volumes and Beverage business showing early signs of recovery Supermarkets business gaining momentum post re-branding with recurring EBITDA growth Whilst City Hotels performance is impacted by a sharp increase in room supply and political volatility during the quarter, Sri Lanka and Maldives Resorts show improvement in recurring profitability Launch of Tri-Zen project in January 2019 will positively impact Property performance from June 2019 quarter Financial Services impacted by marked to market losses at Union Assurance PLC due to decline in stock market The revenue at Rs billion for the third quarter of the financial year 2018/19 is a 17 per cent increase over the Rs billion recorded in the previous financial year. The cumulative revenue for the first nine months of the financial year 2018/19 at Rs billion is an increase of 13 per cent over the revenue of Rs billion recorded in the same period of the previous financial year. The profit attributable to equity holders in the third quarter of the financial year 2018/19 at Rs.4.80 billion is an increase of 7 per cent over the corresponding period of the previous financial year, whilst the first nine months performance at Rs billion is an increase of 9 per cent over the previous year. The Group earnings before interest, tax, depreciation and amortisation (EBITDA) at Rs.5.85 billion in the third quarter of the financial year 2018/19 is an increase of 2 per cent over the Rs.5.74 billion recorded in the corresponding period of the previous financial year. The Group EBITDA for the first nine months of the financial year 2018/19 at Rs billion is a decrease of 2 per cent over the EBITDA of Rs billion recorded in the same period of the previous financial year. The Group profit before tax (PBT) at Rs.5.63 billion in the third quarter of the financial year 2018/19 is a decrease of 3 per cent over the Rs.5.83 billion recorded in the corresponding period of the previous financial year. The Group PBT for the first nine months of the financial year 2018/19 at Rs billion is a decrease of 11 per cent over the PBT of Rs billion recorded in the same period of the previous financial year. The Company PBT for the third quarter of 2018/19 at Rs.3.76 billion is an increase of 59 per cent over the Rs.2.36 billion recorded in the corresponding period of 2017/18. The increase in PBT is mainly attributable to the higher exchange gains recorded at the Company on its foreign currency denominated cash holdings compared to the corresponding quarter of the previous financial year. The Company PBT for the first nine months of the financial year 2018/19 at Rs.8.81 billion is an increase of 11 per cent over the previous financial year. Following a period of political volatility and uncertainty from late October to December 2018, stability has been restored. We reiterate that political stability and policy continuity is essential for economic and business growth. Transportation The Transportation industry group PBT of Rs.1.10 billion in the third quarter of 2018/19 is an increase of 16 per cent over the third quarter of the previous financial year [2017/18 Q3: Rs.945 million]. The increase in profitability is mainly on account of the performance of the Group s Ports and Shipping business, South Asia Gateway Terminals (SAGT). SAGT recorded a growth in throughput of 8 per cent, with transshipment volumes contributing to approximately 77 per cent of total volume. The calendar year 2018 marked a significant milestone for both the Port of Colombo and SAGT, recording an all-time high of handling over 7 million TEUs and 2 million TEUs, respectively. The overall capacity utilisation of the Port of Colombo is now in excess of 85 per cent, demonstrating the strong potential for continued capacity led growth. In this context, timely development of the deep-draft East Container Terminal (ECT) is critical to ensure that capacity continues to be enhanced towards attracting further volumes and to sustain continued growth at the Port. Whilst 1

4 CHAIRMAN S REVIEW the Group s Bunkering business, Lanka Marine Services, recorded a 9 per cent growth in volumes, profits were impacted by a contraction in blended margins arising from the sharp reduction in global oil prices within a short period. The Logistics business recorded a strong performance due to an increase in throughput in its warehouse facilities. Design work for the new warehouse in Enderamulla was completed during the quarter under review, whilst the civil and structural scopes are expected to be issued in the ensuing quarter. Consumer Foods The Consumer Foods industry group PBT of Rs.332 million in the third quarter of 2018/19 is a decrease of 36 per cent over the third quarter of the previous financial year [2017/18 Q3: Rs.520 million]. The decline in profitability is primarily on account of a volume decline of 23 per cent in the carbonated soft drinks (CSD) range of the Beverages business. The decline in beverage volumes is due to the implementation of the sugar tax on CSD which resulted in substantial price increases across the industry. As a result of its lower operating leverage, the EBITDA of the beverage business recorded a decrease of 69 per cent in the third quarter of 2018/19 compared to the corresponding period of the previous financial year. However, it is encouraging that the growth in monthly volumes within the quarter has been on an upward trend. The Frozen Confectionery business recorded a volume growth of 7 per cent during the quarter under review, driven by growth in the impulse segment. Given the significant investment in the newly constructed Frozen Confectionery plant in Seethawaka, Colombo Ice Company Limited (CICL), and the associated depreciation of the infrastructure coupled with the financing expenditure, EBITDA is more reflective of the underlying growth of the business. Accordingly, the EBITDA for the Frozen Confectionery business increased by 18 per cent compared to the corresponding period of 2017/18. During the quarter, two new impulse stick range varieties were launched. Keells Food Products PLC recorded a 3 per cent growth in volumes and a better sales mix. Retail The Retail industry group PBT of Rs.159 million in the third quarter of 2018/19 is a decrease of 71 per cent against the third quarter of the previous financial year [2017/18 Q3: Rs.540 million]. The Supermarkets business PBT of Rs.137 million in the third quarter of 2018/19 is a decrease against the third quarter of the previous financial year [2017/18 Q3: Rs.427 million]. As planned, the refitting and rebranding of all outlets was completed by November The new Keells brand was formally launched during the quarter under review. The new brand has been very well received and we are confident that it will continue to drive footfall in line with our expectations. The supermarkets business recorded a growth of 4.2 per cent in customer footfall which contributed towards a modest growth of 2.4 per cent in same store sales, despite the subdued macro conditions which also resulted in a contraction in average basket values. Excluding the one-off re-fit and re-branding costs, EBITDA for the quarter showed an encouraging growth of 7 per cent. During the quarter under review, four new outlets were opened, bringing the total store count to 91 as at 31 December Leisure The Leisure industry group PBT of Rs.694 million in the third quarter of 2018/19 is a decrease of 23 per cent over the third quarter of the previous financial year [2017/18 Q3: Rs.901 million]. The Leisure industry group EBITDA in the third quarter of 2018/19 is a decrease of 9 per cent over the third quarter of the previous financial year. The decline is mainly attributable to the City Hotels sector which maintained room rates, but witnessed a decline in occupancies due to the increased supply of room inventory within Colombo, which impacted profitability. The trend of continued growth in demand for city rooms was impacted in this quarter by the political volatility, which restricted, in particular, business travel to the city. Operating profitability in the Sri Lankan Resorts segment improved during the quarter. However, PBT was impacted by exchange losses on the translation of its foreign currency denominated debt arising from the depreciation of the Rupee during the quarter. The business will however accrue the benefits of the depreciation on account of its foreign currency denominated revenue streams over 2 John Keells Holdings PLC

5 Financial Information the ensuing periods. The Maldivian Resorts segment recorded an improvement in average room rates and occupancies, although profitability was impacted by the closure of Cinnamon Hakuraa Huraa Maldives for re-construction of a new hotel. The re-opening of the hotel is on track for December It is encouraging to note that subsequent to the refurbishment of Cinnamon Dhonveli Maldives, the average room rates of the hotel recorded for the quarter under review is above expectations. Property The Property industry group PBT at Rs.14 million in the third quarter of 2018/19 is a decrease of 58 per cent over the third quarter of the previous financial year [2017/18 Q3: Rs.34 million]. The decline in profitability is on account of a noncash consolidation adjustment for the acceleration of the depreciation of old buildings by a Real Estate company on a land earmarked for future development. The construction of Cinnamon Life is progressing with encouraging momentum. The super structure of The Suites at Cinnamon Life has been completed whilst all other buildings are also nearing completion. The installation of the mechanical and electrical services, the external façades and the internal works are now underway. Preliminary construction work has commenced on the 891-apartment joint venture residential development project, Tri-Zen, in Union Place, Colombo. The piling work at the site will commence in February The pre-sales for the project continue to be encouraging. We expect to commence revenue recognition on this project from the June 2019 quarter onwards. Financial Services The Financial Services industry group PBT of Rs.936 million in the third quarter of 2018/19 is a decrease of 39 per cent over the third quarter of the previous financial year [2017/18 Q3: Rs.1.54 billion]. Whilst Union Assurance PLC recorded an encouraging growth of 12 per cent in gross written premiums, profitability was impacted by marked to market losses on its portfolio of equity investments. Whilst Nations Trust Bank recorded an improvement in net interest income and steady loan growth, profitability during the quarter under review was impacted by the introduction of the debt repayment levy. Other, Including Information Technology and Plantation Services Other, including Information Technology and Plantation Services industry group recorded a PBT of Rs.2.40 billion in the third quarter of 2018/19 which is an increase of 78 per cent over the third quarter of the previous financial year [2017/18 Q3: Rs.1.35 billion]. The increase in PBT is mainly attributable to the higher exchange gains recorded at the Company on its foreign currency denominated cash holdings compared to the corresponding quarter of the previous financial year. The Information Technology sector recorded an increase in profitability on account of onboarding new clients. The performance of the Plantation Services sector was impacted by a decrease in tea prices during the quarter under review. Sustainability Initiatives The carbon footprint and water withdrawn per million rupees of revenue decreased by 17 per cent and 20 per cent respectively, to 0.63 metric tons and cubic meters, for the quarter under review. In absolute terms, the carbon footprint increased by 5 per cent to 24,447 MT whilst water withdrawal increased by 2 per cent to 443,989 cubic meters, driven by the increased operational activity in the Supermarket business as well as the inclusion of the new Frozen Confectionery plant (Colombo Ice Company Limited) to the sustainability reporting scope. It is encouraging to report that there is a 3 per cent reduction in energy usage and a 8 per cent reduction in water usage, from the baseline established for achieving the 2020 Group sustainability goals. The Group continuously monitors the progress towards the established goals and will strive to achieve the 2020 Goal. Further, Group employees were provided with approximately 10 hours of training per employee, whilst 50 occupational injuries were reported during the quarter under review. Corporate Social Responsibility Following are some of the highlights of John Keells Foundation s (JKF) initiatives during the quarter under review: Under the John Keells English Language Scholarship Programme, 245 students commenced the pre-intermediate 3

6 CHAIRMAN S REVIEW course, while 46 students commenced the intermediate level. The foundation-level course was inaugurated in 10 out of the 17 locations. The annual Career Guidance Programme under the Neighbourhood Schools Development Project was conducted with the participation of 85 students. JKF organised a full day soft skills workshop at the Sabaragamuwa University in collaboration with the Alumni Association of the Faculty of Management Studies for 617 students. Under the John Keells Vision Project, 239 cataract patients were identified at eye camps held in Sooriyawewa and Ginigathhena. 4,485 school children from 23 schools underwent vision screening and 355 eye glasses were donated under the Vision Screening Programme of School Children of the Colombo District in collaboration with the Department of Health Services. Under the John Keells HIV & AIDS Awareness Campaign, 3,098 army personnel were sensitised at 6 army training centres. Under Project WAVE (Working Against Violence through Education), JKF conducted the following programs: - A public transport campaign to coincide with the International Day for the Elimination of Violence Against Women for the third successive year. 75 staff volunteers participated in pasting stickers on buses and distributing information cards to commuters at four main public and private bus terminals in Colombo estimated to impact over 100,000 persons. - Awareness sessions on preventing and addressing sexual harassment in the workplace sensitising 85 supervisory level staff of Cinnamon resorts in the Maldives. - A police training program in partnership with The Asia Foundation where 41 police officers from 8 police stations of the Colombo Central Police Division were trained on responding effectively and appropriately to instances of violence against women. JKF conducted a community awareness programme covering youth skills and career development opportunities, child protection and substance abuse prevention benefiting 75 persons. Cinnamon Elephant Project (a collaborative elephant conservation effort by Cinnamon Hotels Management, JKF and the Centre for Conservation and Research) won the silver award at the International Travel & Tourism Awards 2018 under the category of Best in Responsible Tourism. Under the Village Adoption Project in Mullaitivu, construction work on a Community Centre in Puthumathalan was completed. JKF launched its Volunteer Connect App aimed at serving as a one-stop-shop for volunteer engagement. Dividends The Company paid a first interim dividend for the financial year 2018/19 in November 2017, amounting to Rs.2.00 per share. Your Board declared a second interim dividend of Rs.2.00 per share to be paid on 22 February Share Repurchase As announced to the Colombo Stock Exchange, the repurchase offer for 69,376,433 ordinary shares, (being 5 per cent of its issued shares) concluded in January 2019, with acceptance of 46 per cent of the offer (32,189,118 ordinary shares) and the balance (37,187,315 ordinary shares) being accepted proportionately based on applications for additional shares to be repurchased. Accordingly, a total amounting to Rs billion was paid out on 25 January Retirements I would like to place on record our deep appreciation for the invaluable contribution made by our former Chairman, Mr. Susantha Ratnayake, who retired with effect from 31 December Krishan Balendra Chairman 31 January John Keells Holdings PLC

7 Financial Information CONSOLIDATED INCOME STATEMENT Quarter ended 31 December Note Change % Nine months ended 31 December Change % Continuing operations Goods transferred at a point in time 26,241,440 21,416, ,187,827 60,126, Services transferred over time 10,304,991 9,799, ,095,585 27,535,893 (2) Revenue from contracts with customers 36,546,431 31,216, ,283,412 87,662, Cost of sales (29,169,358) (24,332,208) 20 (80,149,275) (66,946,413) 20 Gross profit 7,377,073 6,883, ,134,137 20,716,003 (8) Other operating income 613, , ,618,755 1,559,797 4 Selling and distribution expenses (1,664,888) (1,136,594) 46 (4,505,023) (3,133,636) 44 Administrative expenses (3,602,758) (3,125,619) 15 (9,842,101) (9,573,199) 3 Other operating expenses (953,222) (751,675) 27 (2,860,565) (2,310,726) 24 Results from operating activities 1,769,278 2,399,253 (26) 3,545,203 7,258,239 (51) Finance cost (338,084) (153,308) 121 (1,564,303) (414,081) 278 Finance income 3,863,084 2,615, ,173,835 8,609, Change in insurance contract liabilities 6 (896,457) 663 (135,312) (2,321,136) (3,626,788) (36) Share of results of equity accounted investees 1,235, , ,401,161 3,039, Profit before tax 5,633,174 5,829,650 (3) 13,234,760 14,867,031 (11) Tax expense 7 (590,201) (1,025,294) (42) (642,050) (3,038,730) (79) Profit for the period 5,042,973 4,804, ,592,710 11,828,301 6 Attributable to: Equity holders of the parent 4,800,811 4,492, ,082,799 11,055,001 9 Non-controlling interest 242, ,160 (22) 509, ,300 (34) 5,042,973 4,804, ,592,710 11,828,301 6 LKR. LKR. LKR. LKR. Earnings per share Basic Diluted Dividend per share Note : All values are in LKR 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 5

8 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Quarter ended 31 December Nine months ended 31 December Note Profit for the period 5,042,973 4,804,356 12,592,710 11,828,301 Other comprehensive income Other comprehensive income to be reclassified to income statement in subsequent periods Currency translation of foreign operations 4,621,447 (339,895) 8,800,391 (15,719) Net gain/(loss) on cash flow hedges (197,354) 128,311 (24,206) 108,384 Net gain/(loss) on debt instruments at fair value through other comprehensive income Share of other comprehensive income of equity-accounted investees Net other comprehensive income to be reclassified to income statement in subsequent periods Other comprehensive income not to be reclassified to income statement in subsequent periods Net gain/(loss) on equity instruments at fair value through other comprehensive income (228,555) 45,405 (354,113) 899, ,154 (20,018) 1,078,313 20,827 4,741,692 (186,197) 9,500,385 1,012,961 (21,321) (77,698) (18,149) (67,839) Revaluation of land and buildings - 1,916,986-1,983,986 Remeasurement gain / (loss) on defined benefit plans (9,600) Share of other comprehensive income of equity-accounted investees Net other comprehensive income not to be reclassified to income statement in subsequent periods , ,632 (21,321) 1,839, ,325 2,067,179 Tax on other comprehensive income 7 - (20,007) (32,404) (22,708) Other comprehensive income for the period, net of tax 4,720,371 1,633,084 9,755,306 3,057,432 Total comprehensive income for the period, net of tax 9,763,344 6,437,440 22,348,016 14,885,733 Attributable to: Equity holders of the parent 9,210,545 5,787,298 21,222,889 13,664,328 Non-controlling interest 552, ,142 1,125,127 1,221,405 9,763,344 6,437,440 22,348,016 14,885,733 Note : All values are in LKR 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 6 John Keells Holdings PLC

9 CONSOLIDATED STATEMENT OF FINANCIAL POSITION Financial Information As at ASSETS Non-current assets Property, plant and equipment 93,420,641 87,259,873 Lease rentals paid in advance 14,466,167 13,004,939 Investment property 13,651,399 12,427,058 Intangible assets 3,121,742 2,010,191 Investments in equity accounted investees 25,546,724 22,335,347 Non current financial assets 33,486,794 32,878,254 Deferred tax assets 1,856, ,503 Other non current assets 73,541,366 53,599, ,091, ,686,512 Current assets Inventories 8,115,675 6,689,541 Trade and other receivables 14,765,741 12,273,372 Amounts due from related parties 336, ,640 Other current assets 6,454,209 4,390,258 Short term investments 58,067,058 64,386,093 Cash in hand and at bank 10,336,049 10,882,856 98,075,593 98,761,760 Total assets 357,167, ,448,272 EQUITY AND LIABILITIES Equity attributable to equity holders of the parent Stated capital 62,802,327 62,802,327 Revenue reserves 93,988,936 87,265,501 Other components of equity 59,355,599 49,852, ,146, ,920,091 Non-controlling interest 25,881,772 24,944,488 Total equity 242,028, ,864,579 Non-current liabilities Insurance contract liabilities 32,088,277 30,230,539 Interest bearing loans and borrowings 21,310,713 18,521,034 Deferred tax liabilities 7,125,698 7,089,179 Employee benefit liabilities 2,170,877 1,971,420 Other deferred liabilities 234, ,403 Other non-current liabilities 10,272,441 6,704,368 73,202,677 64,707,943 Current liabilities Trade and other payables 18,357,927 16,077,499 Amounts due to related parties 39,221 5,168 Income tax liabilities 1,923,936 2,078,807 Short term borrowings 4,601,385 3,128,508 Interest bearing loans and borrowings 1,877,959 2,062,465 Other current liabilities 3,797,597 3,513,214 Bank overdrafts 11,337,923 6,010,089 41,935,948 32,875,750 Total equity and liabilities 357,167, ,448,272 LKR LKR Net assets per share Note : All values are in LKR 000s, unless otherwise stated. The above figures are not audited. I certify that the financial statements comply with the requirements of the Companies Act No.7 of K M Thanthirige Group Financial Controller The Board of Directors is responsible for these financial statements. K N J Balendra Chairman 31 January 2019 J G A Cooray Deputy Chairman/Group Finance Director 7

10 CONSOLIDATED STATEMENT OF CASH FLOWS For the nine months ended 31 December Note CASH FLOWS FROM OPERATING ACTIVITIES Profit before working capital changes A 5,917,269 7,163,091 (Increase) / Decrease in inventories (1,426,134) (274,307) (Increase) / Decrease in trade and other receivables 6,273,780 (35,623) (Increase) / Decrease in other current assets (2,029,596) 165,661 (Increase) / Decrease in other non-current assets (19,942,019) (6,546,985) Increase / (Decrease) in trade and other payables and other non-current liabilities 5,882,554 1,160,608 Increase / (Decrease) in other current liabilities 275, ,814 Increase / (Decrease) in insurance contract liabilities 1,857,738 3,255,515 Cash generated from operations (3,191,126) 5,243,774 Finance income received 10,173,835 8,281,122 Finance costs paid (938,632) (414,081) Dividend received 1,533,483 1,341,176 Tax paid (2,463,943) (4,004,514) Gratuity paid (160,159) (129,525) Net cash flow from operating activities 4,953,458 10,317,952 CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES Purchase and construction of property, plant and equipment (8,739,717) (7,506,746) Purchase of intangible assets (1,437,058) (180,314) Addition to investment property (1,224,341) (4,397,291) Acquisition of subsidiaries (net of cash acquired) - (78,584) Investments in equity accounted investees - (1,804,500) Proceeds from sale of property, plant and equipment and intangible assets 121, ,090 Proceeds from sales of non-current investments - 207,164 Proceeds from sale of financial instruments - fair valued through profit or loss 466, ,411 Purchase of financial instruments - fair valued through profit or loss (572,158) (969,932) (Purchase) / disposal of short term investments (net) (17,183,717) (13,439,257) (Purchase) / disposal of non current financial assets (net) (1,016,761) (4,706,672) Grants received for investing activities 26,381 32,476 Net cash flow from / (used in) investing activities (29,559,860) (31,869,155) CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES Proceeds from issue of shares - 5,369 Changes in non-controlling interest 292,921 (293,890) Dividend paid to equity holders of parent (5,550,114) (5,549,936) Dividend paid to shareholders with non-controlling interest (288,591) (538,002) Proceeds from long term borrowings 1,289,894 4,990,503 Repayment of long term borrowings (1,468,383) (2,489,187) Proceeds from/(repayment of ) other financial liabilities (net) 1,472, ,361 Net cash flow from / (used in) financing activities (4,251,396) (2,922,782) NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (28,857,798) (24,473,985) CASH AND CASH EQUIVALENTS AT THE BEGINNING 42,427,873 47,643,605 CASH AND CASH EQUIVALENTS AT THE END 13,570,075 23,169,620 ANALYSIS OF CASH AND CASH EQUIVALENTS Favourable balances Short term investments 14,571,949 21,029,545 Cash in hand and at bank 10,336,049 6,119,004 Unfavourable balances Bank overdrafts (11,337,923) (3,978,929) Total Cash and cash equivalents 13,570,075 23,169,620 Note : All values are in LKR 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 8 John Keells Holdings PLC

11 Financial Information For the nine months ended 31 December Note A. Profit before working capital changes Profit before tax 13,234,760 14,867,031 Adjustments for: Finance income (10,173,835) (8,609,699) Finance cost 1,564, ,081 Share-based payment expense 361, ,778 Share of results of equity accounted investees (3,401,161) (3,039,962) Depreciation of property, plant and equipment 2,796,423 2,424,430 Provision for impairment losses 174,700 - (Profit)/loss on sale of property, plant and equipment and intangible assets 42,359 (103,821) Profit on sale of investment in subsidiary - (28,575) Amortisation of lease rentals paid in advance 351, ,486 Amortisation of intangible assets 325, ,190 Amortisation of other deferred liabilities (12,870) (17,824) Employee benefit provision and related costs 356, ,854 Goodwill Impairment - 23,445 Accumulated unrecognised (gain)/ loss (net) - (31,392) Unrealised (gain) / loss on foreign exchange (net) 297,065 25,069 5,917,269 7,163,091 Note : All values are in LKR 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 9

12 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Note Stated capital Revaluation reserve Restricted regulatory reserve Attributable to equity holders of the parent Foreign currency translation reserve Cash flow hedge reserve Other capital reserves Fair value reserve of financial assets at FVOCI Revenue reserves Total Noncontrolling interest Total Equity As at 1 April ,790,080 28,994,792-8,303, ,529 1,402,656 (362,304) 77,193, ,634,832 15,695, ,330,375 Profit for the period ,055,001 11,055, ,300 11,828,301 Other comprehensive income - 1,598,074 - (21,681) 102, ,655 28,401 2,609, ,105 3,057,432 Total comprehensive income - 1,598,074 - (21,681) 102, ,655 11,083,402 13,664,328 1,221,405 14,885,733 Exercise of share options 4, ,985-4,985 Share based payments 1, , , ,778 Final dividend paid / (2,774,934) (2,774,934) - (2,774,934) Interim dividend paid / (2,775,002) (2,775,002) - (2,775,002) Subsidiary dividend to noncontrolling , ,531 (902,533) (538,002) interest Acquisition, disposal and changes in non-controlling interest (354) 272 (294,162) (293,890) As at 31 December ,796,910 30,593,492-8,282, ,407 1,783, ,351 83,090, ,501,790 15,720, ,222,043 As at 1 April ,802,327 34,145,712 3,123,554 9,435, ,932 1,916, ,059 87,265, ,920,091 24,944, ,864,579 Profit for the period ,082,799 12,082, ,911 12,592,710 Other comprehensive income - 16,840-9,294,853 (23,294) - (148,974) 665 9,140, ,216 9,755,306 Total comprehensive income - 16,840-9,294,853 (23,294) - (148,974) 12,083,464 21,222,889 1,125,127 22,348,016 Share based payments , , ,823 Final dividend paid / (2,775,057) (2,775,057) - (2,775,057) Interim dividend paid / (2,775,057) (2,775,057) (2,775,057) Subsidiary dividend to noncontrolling , ,683 (439,274) (288,591) interest Acquisition, disposal and changes in non-controlling interest - 2, ,402 41, , ,921 As at 31 December ,802,327 34,164,640 3,123,554 18,730, ,638 2,278, ,085 93,988, ,146,862 25,881, ,028,634 Note : All values are in LKR 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 10 John Keells Holdings PLC

13 Financial Information COMPANY INCOME STATEMENT Quarter ended 31 December Note Change % Nine months ended 31 December Change % Continuing operations Revenue from contracts with customers 417, , ,263, , Cost of sales (203,633) (130,113) 57 (635,856) (475,841) 34 Gross profit 213, , , , Dividend income 1,386, , ,612,380 3,558,331 (27) Other operating income 3,900 2, ,113 10,208 2,262 Administrative expenses (431,188) (259,598) 66 (1,017,721) (879,328) 16 Other operating expenses (19,761) (7,643) 159 (38,385) (23,495) 63 Results from operating activities 1,152, , ,425,397 3,172,152 (24) Finance cost (664) (32,692) (98) (29,025) (69,681) (58) Finance income 2,611,165 1,473, ,417,042 4,802, Profit before tax 3,763,332 2,364, ,813,414 7,904, Tax expense 7 (248,056) (314,690) (21) (911,551) (1,034,659) (12) Profit for the period 3,515,276 2,050, ,901,863 6,870, LKR. LKR. LKR. LKR. Dividend per share Note : All values are in LKR 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 11

14 COMPANY STATEMENT OF COMPREHENSIVE INCOME Quarter ended 31 December Nine months ended 31 December Note Profit for the period 3,515,276 2,050,053 7,901,863 6,870,040 Other comprehensive income Other comprehensive income not to be reclassified to income statement in subsequent periods Net gain/(loss) on equity instruments at fair value through other comprehensive income Net Other comprehensive income not to be reclassified to income statement in subsequent periods (21,321) (77,699) (18,149) (67,840) (21,321) (77,699) (18,149) (67,840) Tax on other comprehensive income Other comprehensive income for the period, net of tax (21,321) (77,699) (18,149) (67,840) Total comprehensive income for the period, net of tax 3,493,955 1,972,354 7,883,714 6,802,200 Note : All values are in LKR 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 12 John Keells Holdings PLC

15 COMPANY STATEMENT OF FINANCIAL POSITION Financial Information As at ASSETS Non-current assets Property, plant and equipment 106, ,878 Intangible assets 52,045 44,484 Investments in subsidiaries 74,123,730 67,967,918 Investments in equity accounted investees 10,165,655 10,165,655 Non current financial assets 309, ,111 Other non current assets 27,105 20,724 84,783,569 78,593,770 Current assets Trade and other receivables 97,964 70,730 Amounts due from related parties 621, ,364 Other current assets 56, ,977 Short term investments 44,200,394 49,157,472 Cash in hand and at bank 1,503, ,591 46,480,034 50,328,134 Total assets 131,263, ,921,904 EQUITY AND LIABILITIES Stated capital 62,802,327 62,802,327 Revenue reserves 65,233,407 62,881,658 Other components of equity 2,295,799 1,952,125 Total equity 130,331, ,636,110 Non-current liabilities Employee benefit liabilities 231, , , ,788 Current liabilities Trade and other payables 351, ,191 Amounts due to related parties 7,924 5,377 Income tax liabilities 280, ,634 Other current liabilities 10,672 5,327 Bank overdrafts 49,774 62, ,592 1,077,006 Total equity and liabilities 131,263, ,921,904 LKR LKR Net assets per share Note : All values are in LKR 000s, unless otherwise stated. The above figures are not audited. I certify that the financial statements comply with the requirements of the Companies Act No.7 of K M Thanthirige Group Financial Controller The Board of Directors is responsible for these financial statements. K N J Balendra Chairman 31 January 2019 J G A Cooray Deputy Chairman/Group Finance Director 13

16 COMPANY STATEMENT OF CASH FLOWS For the nine months ended 31 December CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax 8,813,414 7,904,699 Adjustments for: Finance income (6,417,042) (4,802,228) Dividend income (2,612,380) (3,558,331) Finance cost 29,025 69,681 Profit on sale of non-current investments (224,173) - Depreciation of property, plant and equipment 27,855 22,913 Profit/ (loss) on sale of property, plant and equipment and intangible assets 9,999 (354) Amortisation of intangible assets 9,018 14,383 Share based payment expenses 112, ,610 Employee benefit provision and related costs 41,939 28,330 Profit before working capital changes (210,186) (197,297) (Increase) / Decrease in trade and other receivables (246,469) (41,770) (Increase) / Decrease in other current assets 142,515 45,984 (Increase) / Decrease in other non-current assets (6,381) (3,441) Increase / (Decrease) in trade and other payables 27,370 (379,909) Increase / (Decrease) in other current liabilities 5,345 (7,897) Cash generated from operations (287,806) (584,330) Finance income received 4,475,302 4,411,596 Finance costs paid (34,522) (67,848) Dividend received 2,614,593 3,682,864 Tax paid (1,302,481) (1,231,350) Gratuity paid (19,247) 20,131 Net cash flow from operating activities 5,445,839 6,231,063 CASH FLOWS FROM/ (USED IN) INVESTING ACTIVITIES Purchase and construction of property, plant and equipment (15,986) (77,449) Purchase of intangible assets (16,581) (14,278) Investment in subsidiaries - (6,177,680) Increase in interest in subsidiaries (5,974,576) (4,506,927) Proceeds from sale of property, plant and equipment Proceeds from sale of non-current investments 290,299 - (Purchase) / disposal of short term investments (net) (15,015,908) (15,986,570) (Purchase) / disposal of non current financial assets (net) (37,601) (18,501) Net cash flow from/(used in) investing activities (20,770,147) (26,780,898) CASH FLOWS FROM / (USED IN) FINANCING ACTIVITIES Proceeds from issue of shares - 4,985 Dividend paid (5,550,114) (5,549,936) Net cash flow from / (used in) financing activities (5,550,114) (5,544,951) NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (20,874,422) (26,094,786) CASH AND CASH EQUIVALENTS AT THE BEGINNING 31,122,950 39,989,190 CASH AND CASH EQUIVALENTS AT THE END 10,248,528 13,894,404 ANALYSIS OF CASH & CASH EQUIVALENTS Favourable balances Short term investments 8,794,530 13,835,122 Cash in hand and at bank 1,503, ,441 Unfavourable balances Bank overdrafts (49,774) (204,159) Total cash and cash equivalents 10,248,528 13,894,404 Note : All values are in LKR 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 14 John Keells Holdings PLC

17 Financial Information COMPANY STATEMENT OF CHANGES IN EQUITY Note Stated capital Other capital reserves Fair value reserve of financial assets at FVOCI Revenue reserves Total As at 1 April ,790,080 1,402, ,220 49,988, ,283,451 Profit for the period ,870,040 6,870,040 Other comprehensive income - - (67,840) - (67,840) Total comprehensive income - - (67,840) 6,870,040 6,802,200 Exercise of share options 4, ,985 Share based payments 1, , ,778 Final dividend paid / (2,774,934) (2,774,934) Interim dividend paid / (2,775,002) (2,775,002) As at 31 December ,796,910 1,783,589 34,380 51,308, ,923,478 As at 1 April ,802,327 1,916,415 35,710 62,881, ,636,110 Profit for the period ,901,863 7,901,863 Other comprehensive income - - (18,149) - (18,149) Total comprehensive income - - (18,149) 7,901,863 7,883,714 Share based payments - 361, ,823 Final dividend paid / (2,775,057) (2,775,057) Interim dividend paid / (2,775,057) (2,775,057) As at 31 December ,802,327 2,278,238 17,561 65,233, ,331,533 Note : All values are in LKR 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 15

18 NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS Operating segment information Business segments The following tables present revenue, profit information and other disclosures regarding Group s business segments. Transportation Consumer Foods Retail For the Quarter ended 31 December Goods transferred at a point in time 7,031,957 4,389,948 3,937,230 3,661,837 14,912,965 12,704,447 Services transferred over time 615, , , ,437 Total segment revenue from contracts with customers 7,647,466 4,894,656 3,937,230 3,661,837 14,934,252 12,886,884 Eliminations of inter segment revenue Net revenue from contracts with customers Segment results 227, , , , , ,743 Finance cost (25,746) (14,520) (66,892) (1,850) (169,553) (19,501) Finance income 31,645 36,023 10,537 35,244 6,564 4,462 Share of results of equity accounted investees 901, , Eliminations / adjustments (39,333) (780) (3,000) 22, Profit / (loss) before tax 1,096, , , , , ,704 Tax expense (8,632) (60,432) 285 (149,244) (4,418) (156,594) Profit / (loss) for the period 1,087, , , , , ,110 Purchase and construction of PPE* 40,917 13, ,352 1,738,963 1,479, ,503 Addition to IA* - - 2,405-46,085 13,666 Depreciation of PPE* 64,965 28, , , , ,047 Amortisation / impairment of IA* ,128 12,771 2,402 Amortisation of LRPA* Employee benefit provision and related costs 7,728 4,113 30,029 22,220 14,881 23,064 In addition to segment results, information such as finance costs / income, tax expenses has been allocated to segments for better presentation. * PPE - Property, plant and equipment, IA - Intangible assets, LRPA - Lease rentals paid in advance Note : All values are in LKR 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 16 John Keells Holdings PLC

19 Financial Information Leisure Property Financial Services Others Group Total , ,728 26,363,379 21,416,960 6,193,414 6,068, , ,570 3,157,467 2,804, , ,956 11,010,961 10,400,557 6,193,414 6,068, , ,570 3,157,467 2,804,795 1,263,707 1,282,684 37,374,340 31,817,517 (827,909) (601,347) 36,546,431 31,216, , ,959 22,166 30, ,239 1,225,995 (198,734) (88,997) 1,981,729 3,296,731 (57,677) (56,862) (9,462) (9,959) 24,586 - (33,340) (50,616) (338,084) (153,308) 89, ,446 30,627 21,910 18,503 25,039 2,633,646 1,486,756 2,820,590 1,709,880 14,578 15,963 (7,886) - 326, , ,235, ,702 (2,932) (4,601) (21,149) (7,971) (3) (66,414) 8, , ,905 14,296 33, ,032 1,542,738 2,401,572 1,347,140 5,633,174 5,829,650 (107,194) (261,825) 3,996 (6,866) (183,364) (1,280) (290,874) (389,053) (590,201) (1,025,294) 587, ,080 18,292 27, ,668 1,541,458 2,110, ,087 5,042,973 4,804,356 1,293,545 1,136,328 1,743 21,408 67,709 13,359 39,096 96,394 3,400,882 3,621, ,226, ,684 19,993 6,884 1,294, , , ,302 7,864 8,366 18,948 17,567 51,248 36, , ,083 11,971 13, ,639 54,227 4,802 6, ,612 78, , ,331 5,039 5, , ,458 52,881 31, ,340 12,450 42,090 10, , ,358 17

20 NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS Operating segment information Business segments The following tables present revenue, profit information and other disclosures regarding Group s business segments. Transportation Consumer Foods Retail For the nine months ended 31 December Goods transferred at a point in time 17,568,060 11,342,586 11,933,672 11,734,122 41,462,698 35,266,860 Services transferred over time 1,745,638 1,313, , ,465 Total segment revenue from contracts with customers 19,313,698 12,656,572 11,933,672 11,734,122 41,523,202 35,578,325 Eliminations of inter segment revenue Net revenue from contracts with customers Segment result 704, ,431 1,244,367 1,790, ,476 1,539,005 Finance cost (75,272) (39,562) (146,871) (7,286) (355,223) (37,159) Finance income 102,917 99,644 45,689 86,639 18,003 27,509 Share of results of equity accounted investees 2,388,906 2,098, Eliminations / adjustments (117,999) 72,493 (29,000) 16, Profit / (loss) before tax 3,002,616 2,816,966 1,114,185 1,885, ,256 1,529,355 Tax expense (34,341) (119,047) (274,936) (543,051) (106,601) (451,806) Profit / (loss) for the period 2,968,275 2,697, ,249 1,342, ,655 1,077,549 Purchase and construction of PPE* 145, ,208 1,577,342 2,264,225 4,047,898 1,926,377 Addition to IA* 850-2, ,692 13,866 Depreciation of PPE* 193,468 82, , , , ,881 Amortisation / impairment of IA* 1,588 2,306 2,279 3,359 24,760 6,785 Amortisation of LRPA* - - 2,270 1, Employee benefit provision and related costs 16,691 12,980 88,504 67,330 38,717 35,207 In addition to segment results, information such as finance costs / income, tax expenses has been allocated to segments for better presentation. * PPE - Property, plant and equipment, IA - Intangible assets, LRPA - Lease rentals paid in advance Note : All values are in LKR 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 18 John Keells Holdings PLC

21 Financial Information Leisure Property Financial Services Others Group Total ,575,018 1,984,098 72,539,448 60,327,666 16,091,767 16,778, , ,013 8,211,922 7,587,989 2,311,132 2,416,525 29,123,237 29,070,223 16,091,767 16,778, , ,013 8,211,922 7,587,989 3,886,150 4,400, ,662,685 89,397,889 (2,379,273) (1,735,473) 99,283,412 87,662, ,634 1,705,197 (8,759) 126,868 1,549,997 1,171,049 (366,433) (65,081) 4,526,346 6,853,058 (157,841) (175,318) (26,386) (24,569) (686,695) (309) (116,015) (129,878) (1,564,303) (414,081) 259, , ,284 71, ,168 91,621 6,478,543 4,842,956 7,145,463 5,577,521 34,448 43,562 (23,329) 2,574 1,001, , ,401,161 3,039,962 (14,451) (12,826) (66,380) (23,829) - - (46,077) (241,267) (273,907) (189,429) 868,649 1,918,107 9, ,704 1,970,606 2,157,227 5,950,018 4,406,730 13,234,760 14,867,031 (160,557) (453,496) (19,735) (31,564) 1,240,188 (5,809) (1,286,068) (1,433,957) (642,050) (3,038,730) 708,092 1,464,611 (10,305) 121,140 3,210,794 2,151,418 4,663,950 2,972,773 12,592,710 11,828,301 2,719,155 2,668,396 28,686 28, ,486 26,743 85, ,306 8,739,717 7,506, ,228, ,971 36,669 21,291 1,437, ,314 1,209,867 1,320,423 22,690 19,137 55,090 53, , ,281 2,796,423 2,424,430 35,914 47, , ,091 15,417 19, , , , ,450 15,094 15, , , ,468 98,842 2,116 2,259 19,158 24,968 75,474 43, , ,854 19

22 NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS Operating segment information Business segments The following table presents segment assets and liabilities of the Group s business segments. Transportation Consumer Foods Retail As at Property, plant and equipment 921, ,075 9,094,175 8,071,509 9,562,868 6,283,252 Lease rentals paid in advance , , Investment property - 118, , , Intangible assets 11,886 12, ,590 6, ,632 44,700 Non-current financial assets 150, , , , , ,423 Other non-current assets 23,632 20,268 52,880 46,852 1,064, ,484 Segment non-current assets 1,107,059 1,166,856 9,964,005 8,669,814 10,986,424 7,282,859 Investments in equity accounted investees 12,804,726 10,760, Deferred tax assets Goodwill Eliminations / adjustments Total non-current assets Inventories 1,157, ,600 1,636,018 1,445,001 4,662,811 3,874,804 Trade and other receivables 2,922,458 2,178,988 2,548,176 2,276,076 2,715,747 2,213,106 Short term investments 377, ,943 53,203 1,031,410 10,064 9,745 Cash in hand and at bank 2,498,830 2,880, , , , ,680 Segment current assets 6,956,768 5,911,095 4,560,510 5,045,777 7,887,916 6,461,335 Other current assets Eliminations / adjustments Total current assets Total assets Insurance contract liabilities Interest bearing loans and borrowings - - 1,583,333 1,958,333 29,060 27,483 Employee benefit liabilities 90,260 75, , , , ,244 Other deferred liabilities ,084 36,925 Other non-current liabilities - 10, , , Segment non-current liabilities 90,260 86,171 2,240,368 2,588, , ,652 Deferred tax liabilities Eliminations / adjustments Total non-current liabilities Trade and other payables 1,659,803 1,289,228 1,743,981 1,609,317 7,784,180 6,785,427 Short term borrowings 3,427,393 3,088, ,183,396 - Interest bearing loans and borrowings , ,495-6,088 Bank overdrafts 353, ,280 1,083, ,653 6,427,653 3,655,537 Segment current liabilities 5,441,142 4,638,046 3,327,075 2,353,465 15,395,229 10,447,052 Income tax liabilities Other current liabilities Eliminations / adjustments Total current liabilities Total liabilities Total segment assets 8,063,827 7,077,951 14,524,515 13,715,591 18,874,340 13,744,194 Total segment liabilities 5,531,402 4,724,217 5,567,443 4,942,125 15,635,029 10,675,704 Note : All values are in LKR 000s, unless otherwise stated. The above figures are not audited. 20 John Keells Holdings PLC

23 Financial Information Leisure Property Financial Services Others Group Total ,762,710 43,858,172 4,072,922 4,071,495 2,086,674 2,006,816 1,278,530 1,349,064 72,779,122 66,516,383 12,835,476 11,356, , , ,624 39,505 13,246,718 11,772,315 4,119,798 4,119,798 29,089,356 27,830, ,094,511 1,094,511 34,532,266 33,391, , , ,191 1,379, ,363 95,449 72,617 2,203, ,839 6,496,661 5,670, , ,176 31,524,172 30,999, , ,421 39,500,806 38,106,708 43,830 32,091 72,726,044 53,068, ,913 85,909 43,968 39,469 74,057,773 54,106,569 69,537,663 65,351, ,688,914 85,837,078 35,093,616 33,298,975 2,942,725 2,945, ,320, ,552, , ,216 1,797,695 1,807,074 10,101,789 9,222, ,546,724 22,335,347 1,856, , , ,596 (5,370,893) (4,111,835) 259,091, ,686, , ,244 17,634 15,348 12,688 14, , ,024 8,166,780 6,711,645 4,320,243 3,404, ,927 57,923 1,291, , ,114 1,675,274 15,397,078 12,727,022 4,043,562 5,389, , ,858 9,271,921 7,319,257 44,560,728 50,581,937 59,276,507 65,420,458 1,564,161 1,737, ,185 3,970,514 1,049, ,402 3,213,894 1,134,106 10,010,988 10,914,811 10,271,703 10,864,175 2,591,071 4,998,643 11,625,533 8,790,570 48,957,852 53,702,341 92,851,353 95,773,936 6,454,209 4,390,258 (1,229,969) (1,402,434) 98,075,593 98,761, ,167, ,448, ,088,277 30,230, ,088,277 30,230,539 8,846,544 8,127,078 16,831,215 13,608, ,000 12,000 27,302,152 23,733, , ,772 49,564 45, , , , ,783 2,170,877 1,980, , , , , ,132,632 6,520, ,272,440 6,704,368 9,801,928 8,976,472 27,013,411 20,174,467 32,237,080 30,372, , ,310 72,069,088 62,840,235 7,125,698 7,089,179 (5,992,109) (5,221,471) 73,202,677 64,707,943 3,041,586 2,114, ,319 1,919,764 3,307,469 1,708, , ,406 18,565,034 16,201,531 1,209,450 1,017, ,074 12,074 5,832,313 4,118,558 1,338,679 1,300,868 39, , ,877,959 2,062,465 1,661, ,192 1,291, , , ,566 83,238 76,563 11,409,924 6,082,090 7,251,393 5,310,740 1,685,121 2,891,077 3,816,262 1,961, , ,043 37,685,230 28,464,644 1,923,936 2,078,807 3,797,597 3,513,214 (1,470,815) (1,180,915) 41,935,948 32,875, ,138,625 97,583,693 79,809,366 76,215, ,279,985 90,835,721 46,719,149 42,089,545 51,900,577 56,647, ,171, ,326,837 17,053,321 14,287,212 28,698,532 23,065,544 36,053,342 32,333,724 1,215,249 1,276, ,754,318 91,304,879 21