Sunday, February 5, 2023
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John Keells Chief urges the Govt. to ensure economic stability and growth

Premier diversified blue-chip John Keells Holdings PLC (JKH) urged the Government to ensure proper balance between economic stability and growth as it shores up efforts to boost tax revenue.

This clarion call has been made by the Head of JKH following its Group’ announcement of looking for gaming operators to operate at its flagship project ‘Cinnamon Life’ with the government formalizing the process of issuing licences and monitoring of casino operations in Sri Lanka.

“With the regularizing of gaming, the Group will proceed with finalizing arrangements with prospective gaming, operators to operate at ‘Cinnamon Life’,” JKH Chairman Krishan Balendra said.

The call for judicious balance is whilst recognizing positive progress made by the Government thus far in implementing the reforms and initiatives needed for fiscal consolidation to help overcome the financial crisis.

“We urge the authorities to give due consideration to ensuring tax measures are implemented with a view to striking a balance between economic stability and growth, which can, in turn, affect revenue targets if the base levels of activity are impacted significantly,” JKH Chairperson Krishan Balendra said in his review accompanying the company’s 2Q interim results released this week.

“While revenue enhancing measures are required, Government expenditure should also be optimised to drive economic recovery in a sustained manner,” he emphasized.

JKH Chief noted that the severe pressures on the domestic macro-economy as a result of external pressures have now eased somewhat and will be a positive heading into the ensuing quarter.

“While many fiscal tax consolidation measures have been announced and partly implemented, the impact of these measures on consumer disposable incomes and spending is yet to be fully seen,” he added.

Balendra said JKH is optimistic that Sri Lanka is on a path to recovery, and appreciated the authorities undertaking difficult, yet necessary, corrective measures to revive the economy to overcome the worst economic crisis faced by the country.

Group revenue rose 40% to Rs.69.06 billion in FY232Q whilst Earnings Before Interest Expense, Tax, Depreciation and Amortization (EBITDA) improved by 45% to Rs. 9.29 billion during the quarter under review demonstrating the strong underlying cash operational performance of the Group.

Group profit before tax PBT declined by 10% to Rs. 2.56 billion mainly on account of the second quarter of the previous year including revenue and profit recognition from the handover of the residential apartment units at ‘Cinnamon Life’, and the higher finance expenses due to the significant increase in interest rates on working capital facilities, particularly in the Leisure and Retail industry groups.

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