Fitch Ratings this week affirmed the national long-term rating of John Keells Holdings PLC (JKH) at 'AAA(lka)' and JKH's senior unsecured notes at 'AAA(lka)' and said the ‘outlook remains stable’.
In a press statement, the rating agency said JKH's rating reflects the diversified nature of its businesses, the currently strong financial profile driven in part by its high cash position (estimated at Rs 10 billion as of 3 March 2009 at the holding company), continued strong operating cash generating ability, and the dominant market share of some subsidiaries. However, Fitch notes that JKH has yet to announce plans with regards to the deployment of its cash assets.
JKH Deputy Chairman Ajit Gunewardene said in a statement that the rating confirms the strength of the JKH balance sheet and is a strong signal to banks and other stakeholders. “It is the highest possible credit rating and will support our growth initiatives.”
Fitch said it expects JKH's bunkering business (post FY08 margin erosion) and the Maldivian hotels segment to overcome operational restrictions faced in FY09 and provide more standard returns in FYE10. “The agency also takes comfort from the expected contributions to JKH's cash flows in the near term from the property sector (in FYE10) as well as the customary dividend flow from South Asian Gateway Terminal (SAGT) - the container handling associate of JKH group,” the statement said.
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