Bright Horizons: Navigating Tourism's Growth Revival

0% BRR GHLL 50% RENU *Data as of Mar 2023 100% RCH NEH SERV RPBH RFL | TANG HSIG RHTL AHPL ☐ КНС PEG ☐ LHL TRAN SHOT SHOT.X CHOT STAF MRH SIGV CITH The sector, despite high gearing and the impact of high interest rates, found relief through extended debt moratoriums 400% Between 2018 and 2022, the tourism sector's exposure to banks increased from 4.8% to 6.2% of total gross loans. During this period, total gross loans and advances in the banking sector grew by 50%, while advances and penalties to the tourism sector surged by 95%, notably increasing by 31% in 2022. The tourism sector benefitted from a debt moratorium scheme initiated in mid-2020 due to the pandemic. This scheme continued until 30th Jun 2022, with multiple extensions. Nevertheless, the sector faced challenges due to high inflation and increased electricity tariffs, which added pressure to hotels' working capital requirement. Amidst a high-interest rate environment, several listed hotels have taken steps to fund their working capital and refurbishment requirements through rights issues. The escalation in working capital requirements have contributed to the increased gearing of listed hotels Debt to Equity ratio (%) 350% 300% 250% 200% The Gearing ratio is used to assess a company's financial leverage by comparing its debt to its equity, which helps to evaluate risk profile and financial stability of the firm. High debt may indicate a need for capital infusion in terms of Rights issue 150% 700.00 600.00 500.00 400.00 300.00 Operating CF/EBITDA The Operating Cash Flow (OCF) to EBITDA ratio is used to assess a company's ability to convert its EBITDA into actual cash flow from operations, providing insights into its financial health and cash flow quality. A higher ratio indicates that a company is more efficient at converting its operating earnings into cash from its core operations, which is generally considered favorable as it suggests better cash flow generation and financial health. However, a negative cash flow or tight liquidity may suggest the need for additional capital. (100.00) BERU 100.00 200.00 TRAN BBH KHC REEF CHOT HSIG STAF MARA | RCH SERV CITH LHL AHPL TANG AHUN RFL Source: CBSL, Bloomberg, First Capital Research 25 RPBH EDEN PALM First Capital A Janashakthi Group Company

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