The Cinnamon Life project has been successfully refinanced and the functional currency of the project remains in USD meaning that the initial profitability of the venture will not be directly reflected in the profit and loss statements of the JKH group. Deputy Chairman Gihan Cooray noted that there was much to be done to draw tourists to the country through urban tourism.
Cooray noted that there was finite beach space and experiences that Sri Lanka had to offer and that there was much scope to increase the Meetings, Incentives, Conferences, and Exhibition’s market space for the Indian market through Colombo.
He was speaking to Asia Securities on January 18 as part of their corporate access events. Cooray said the broader JKH group was well managed to handle volatility in the interest rate and exchange rate market. Though refusing to forecast interest rates and exchange rates, Cooray noted that the company was well-positioned to handle volatility brought about by movements in those macroeconomic factors. Cooray was bullish on the tourism sector as he expected there to be a sharp recovery. Cooray noted that due to the Easter Sunday attacks and the subsequent COVID-19 pandemic there had been in effect over 2 years of tourism industry profitability lost. The JKH group was in the midst of a refurbishment drive in their properties and as the tourism sector regains steam is well-positioned to make additional revenue from the industry.
Cooray lamented that the sector was punching well below its potential and that with the advent of the new BIA Airport terminal and the expansion of the Southern Expressway there was much scope to increase the resort tourism offering of the country. Cooray highlighted opportunities for budget carriers to make the country more affordable and accessible through the Mattala airport.
Cooray highlighted the need for the country to improve its urban tourism offering. He noted the Cinnamon Life project was envisioned to cater to large functions with its capacity to cater to over 4,500 pax. Cooray said that the gaming license for the project was planned to be done in partnership with an international operator and that licensing remained a question of government policy.
The broader JKH group is expected to continue to open 10-15 supermarkets every year. The West Container Terminal investment will be staggered and shall have the first phase operational within 24 months of construction which is expected to begin shortly. The corporation is looking to use more targeted marketing methods throughout the group.
The agreement with HCL Sri Lanka to rent out space in Cinnamon Life is to take the form of an option wherein the first 4 months they rent out 5 floors with the option to take out another 5 floors in the next 4-month period followed by 10 floors.
The company is expected to present results in the next two weeks. The company does not expect any further serious disruptions from COVID-19 due to an impressive vaccine rollout. The company remains one of the strongest financial entities with recent equity backing by the ADB.