Expansion of West Container Terminal at Colombo Port
The West Container Terminal (WCT-1) at the Port of Colombo has exceeded initial expectations, with throughput volumes increasing steadily since April. Once fully operational, Phase 1 is expected to add approximately 1.6 million TEUs of capacity to the port, enhancing its ability to capture growing regional container flows, especially between India and other key markets. Last year, India handled around 20-25 million containers, while China managed over 250 million. This expansion marks a significant milestone for John Keells Holdings as it continues to strengthen its presence in the logistics and shipping sector.
During the first full quarter of commercial operations at WCT-1, which was highlighted in the Q1 2025/26 investor presentation, Deputy Chairman Gihan Cooray emphasized that the terminal has the potential to become cash-positive within its first year. Early challenges related to automation and crane utilization were quickly addressed, leading to productivity metrics stabilizing at or above planned levels. The construction of Phase 2 is progressing on schedule, with an expected completion by the second half of 2026/27. This phase will further increase throughput and support breakeven earnings as quarterly volumes continue to rise.
Cooray spoke during the JKH Q1 FY-25-26 investor webinar on August 1, emphasizing that despite some early teething issues, the terminal has scaled up rapidly. Chairman Krishan Balendra echoed this sentiment, stating that the problems encountered were resolved swiftly, and productivity has grown significantly.
Strategic Renewal of SAGT Concession
John Keells Holdings remains open to renewing its adjacent South Asia Gateway Terminals (SAGT) concession, which is set to expire in 2029. Although formal discussions have not yet begun, the company sees the renewal as a strategic move to protect its overall footprint at the Port of Colombo. SAGT handled over 508,000 TEUs in Q1, marking a 2% year-on-year decline but still operating well above its designed capacity. This performance underscores the importance of maintaining the concession as a key asset for the company's long-term growth.
Bunkering Performance and EBITDA Growth
In addition to container operations, the bunkering segment also showed strong results. Lanka Marine Services reported a 13% volume growth in Q1, with improved margins contributing to an 11% increase in EBITDA (excluding CWIT). Management described the performance as "very strong," highlighting its role in supporting overall profitability. This growth reflects the company’s focus on diversifying its revenue streams and strengthening its position in the energy sector.
New Energy Vehicles and EV Charging Expansion
John Keells' New Energy Vehicles (NEV) arm has surpassed expectations, with total BYD orders exceeding 7,100 units in Q1 2025/26. Out of these, 2,307 vehicles have been sold and delivered, with revenue recognized upon handover. Showroom expansions in Ampara and Kurunegala have broadened customer reach, while Keells supermarkets now host around 20 EV charging stations nationwide. The launch of the BYD Shark in May 2025 has gained strong traction, with additional models planned for release later in the year. With sustained order momentum and a growing backlog, the EV business is expected to remain a key driver of growth for the retail segment.
Joint Venture in EV Charging Infrastructure
JAT Holdings PLC, a partner of John Keells in EV charging, has generated LKR 192 million in revenue from its EV-charging venture. This initiative began as a joint R&D effort with a Saudi technology partner under a Joint Venture structure. After development, regional rights were divided, with the Saudi partner taking the Middle East and JAT retaining South and Southeast Asia, while both compete in common territories.
In Q2, JAT incorporated a wholly owned subsidiary, into which it will transfer LKR 400 million of assets. This includes LKR 100 million for testing equipment and charging hardware, and LKR 300 million for IP and software development. Once capital is repaid, 16% equity will be allotted to the technology developers. To date, the venture has sold 2,000 home chargers through BYD and installed 20 fast chargers at Keells Super. Around 80% of installations are complete, with over 50 confirmed orders from external customers beyond BYD and John Keells.