KVPL post–tax profit climbs to Rs 158 million in 1Q

Improved returns from the tea sector has enabled Kelani Valley Plantations PLC (KVPL), the plantation company of Dipped Products PLC, the Hayleys Group’s multinational hand protection business, to post a 147 percent increase in post-tax profit in the three months ending March 31, 2008. According to figures released to the Colombo Stock Exchange this week, the company’s post tax profit grew to Rs 158 million from Rs. 64 million in the corresponding quarter of 2007, while pre-tax profit rose by 140 percent to Rs 162 million in the same period.

Turnover increased to Rs 852 million from Rs 604 million, an increase of 41 percent. Turnover from tea and rubber increased by 58 percent and 19 percent respectively, contributing to this growth, according to a company statement. Commenting on the company’s performance, KVPL Managing Director Kavi Seneviratne said: “We are encouraged by the quarter’s results, especially in the context of increased costs of inputs and high inflationary conditions.” He said the tea sector which recorded an operating loss during the same period last year had shown a satisfactory improvement to reflect a six fold increase. “The rise in prices was mainly driven by the shortfall in Kenyan production due to the political turmoil in that country. The positive impact on price compensated for the shorter quality season experienced during the first quarter,” Seneviratne said.

He also pointed out that the significant improvement in tea production in the first quarter stems from the poor production of last year consequent to the work stoppage in late 2006. Rubber production fell marginally during the period under review due to unfavorable weather conditions. However, operating profit from rubber improved due to stronger prices, Seneviratne said disclosing that although profit from rubber increased by only seven percent, it constituted 60 percent of the operating profit.