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BYD euphoria fades; JKH books City of Dreams fixed rental income for a quarter
View(s):By Kapila Bandara
New sales of Chinese BYD vehicles from John Keells Holdings subsidiary JKCG Auto (Pvt) Ltd, which contributed a big chunk to attributable profit, have gone off the boil after the initial euphoria in a period of macroeconomic stability in the country.
The devastating 27 November cyclone barely left a scratch on big business and banks.
In the quarter ended December, JKCG sold 1,935 vehicles. This was sharply down from 3,705 in the second quarter. In the first quarter 2,307 vehicles were sold, conglomerate JKH said in its interim financial filings this week.
A “couple of models’’ are not imported due to high duties. Some models are imported on bank guarantees, while some are cleared on corporate guarantees.
JKH also said there are more than 3,900 vehicles due for delivery from its 50%-owned subsidiary.
JKCG Auto new sales have “moderated due to the tapering of pent‑up demand’’ after imports were allowed, JKH said, noting the sales momentum was “expected to normalise’’. But, new models are due and “good sales’’ are expected.
Post-tax profit of JKCG Auto was Rs 1.283b for the quarter ended December in 2025/26 financial year.
Gihan Cooray, deputy chairman and group finance director, noted a Rs 3.634b improvement in group post-tax attributable profit, “and the contribution from JKCG was about Rs 1.3 billion of that’’.
JKH group debt and finance costs increased from the JKCG Auto business.
As for the City of Dreams Sri Lanka casino operated by Hong Kong-listed Melco Resorts and Entertainment, JKH reported recognising fixed rental income (there is also a variable part) for a full quarter and steady improvement in gambling.
On a pre-tax and attributable income basis, City of Dreams Sri Lanka has only done “marginally better’’, versus the year before, JKH noted.
JKH Chairman and Chief Executive Officer Krishan Balendra told an investor webinar that there is “strong interest for conferences and corporate events from overseas, in particular from India’’ for City of Dreams Sri Lanka. He flagged a “big global conference’’ mid year.
Gambling is a highlight to attract corporate business and conference business to the property as there is entertainment, he said.
For the quarter ended December, post-tax income of City of Dreams Sri Lanka was negative Rs 2.627 billion.
Hotel occupancy —800 rooms including 113-room Nüwa hotel — improved to 45% in the third quarter and average room rate climbed to US$116 compared with US$73 for Colombo hotels excluding Cinnamon Life and Cinnamon Red, amid increasing room supply.
City of Dreams Sri Lanka casino opened in August 2025.
JKH subsidiary Waterfront Properties (Private) Ltd., rents the casino space to Macau’s Melco Resorts and Entertainment headed by casino magnate Lawrence Ho Yau-lung. Melco manages the Nüwa hotel, the top five floors. JKH pays management fees to Melco Resorts.
Referring to malls, JKH said the variable rental will be effective “once the operations reach a certain level of performance’’.
JKCG Auto switched to BYD hybrids in the wake of the electric motor power tussle with Sri Lanka Customs. It launched the pricey ‘Denza’ range and in November rolled out the ‘Atto 1’ and ‘Atto 2’ compacts.
JKCG has given a bank guarantee of Rs.7.949b to Sri Lanka Customs to release detained electric BYDs.
Total JKH group debt increased to Rs 232.995b in the December quarter. JKH explained that the BYD business with “about Rs 15b debt’’, was “one of the main reasons’’ for the higher debt.
JKH net income in the latest quarter was Rs 6.479 billion on revenue of Rs 125.053b, while nine month net income was Rs 7.328b on revenue of Rs 383.961b.
For the nine months, JHK paid out Rs 2.650b to shareholders.
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