News
City of Dreams casino and mall opening amid need for further funding
View(s):By Kapila Bandara
City of Dreams Sri Lanka casino will open in August along with sections of the shopping mall in the backdrop of improving foreign visitor arrivals, in particular Indians, but fewer Chinese, and the need for further funding for the project, which has been evolving over a decade.
JKH explained at the end of the fourth quarter of its financial year, that a “little further funding’’ is needed for City of Dreams Sri Lanka, a tax-exempt business.
Reviewing the fourth quarter and annual earnings, Gihan Cooray, deputy chair and group finance director noted in an investor webinar that John Keells Holdings has capital expenditure “relating to just the final aspects of the retail mall, as well as completion of Nüwa [the ultra luxury hotel]. So, there is a little further funding that’s required for the project. But in terms of capex for City of Dreams Sri Lanka, we don’t expect anything significant’’.
JHK said that as for equity infusions, the borrowing costs as well as the operational losses have to be funded. In the leisure segment, finance costs increased to Rs 1.768b in the fourth quarter of the financial year from Rs 1.705b in the third quarter. City of Dreams Sri Lanka interest costs increased to above Rs 1b in the fourth quarter.
Equity infusion for the project was
Rs 27.21b in 2024-2025. Group finance costs dropped to Rs 4.841b in the fourth quarter from Rs 5.024b in the preceding quarter.
Total debt, excluding leases for 2024-2025 was Rs 210.411 billion.
City of Dreams Sri Lanka has operational losses. The project company, JKH subsidiary, Waterfront Properties (Pvt) Ltd will not pay taxes for 10 years from the first year of profit, or three years from operations.
City of Dreams Sri Lanka is named after City of Dreams Macau, which opened in 2009. City of Dreams Macau, an attractive, luxurious gambling, shopping, dining, and entertainment venue, is the flagship of Melco Resorts & Entertainment.
At City of Dreams Sri Lanka, visitors to the mall and gamblers will be able to enter the casino from the 7th floor of the mall.
Melco Resorts & Entertainment will collect fees from JKH for managing the Nüwa hotel.
At Cinnamon Life at City of Dreams
Sri Lanka, which opened in October, the occupancy of the 687-room hotel in May is low — about 150 rooms a day. JKH said May occupancy “is expected to be around 25%’’. The “ramp up’’ has been “gradual’’.
JKH explained at the end of the fourth quarter of its financial year that mall occupancy on the 7th floor is “expected to be nearly 100%’’ at the time of the casino opening.
The integrated resort in Colombo is a standout architecturally compared with the other externally drab casinos in the capital. The gambling space is operated by Macau casino owner and developer Melco Resorts & Entertainment in a strategic partnership with John Keells Holdings. Melco Resorts & Entertainment is majority owned by Melco International Development.
Melco Resorts & Entertainment has spent about Rs 10 billion for the project — US$125m (about Rs 4.77b) for fitting out the casino and 20-year license fee of HK$129.880 million (about Rs 4.95b) by Melco Resorts subsidiary Bluehaven Services (Private) Limited, which was given the license by the previous Government. JKH has reported that capital expenditure for the casino project in 2024/25 was Rs. 33.61b, rising from Rs. 21.51b in the previous financial year. This was out of Rs.49.89b group capex. The project is part of the reason for the group debt to grow and JKH has said the debt is “manageable’’.
JKH group net profit more than halved falling by 53% to Rs. 5.32b versus Rs.11.24b in 2023/24. Net profit margin dropped to 1.5% from 3.5% the previous year. Group revenue grew by 13% to Rs. 317.38b.
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