Palm oil the winner at Watawala Plantations
View(s):Watawala Plantations PLC has seen its profit rise to its highest-ever in the history of the company purely owing to its palm oil plantations against traditional crop – tea.
Out of the company’s net profit of Rs. 1,230 million for the year ending March 2017, which was an increase of Rs.712 million from the previous financial year, palm oil alone accounted for Rs.1,025 million as against Rs. 682 million FY16.
“The increased profitability is primarily attributable to the increased crop and higher net sale average achieved during the year. However the palm oil segment profitability was below the expectations as the government reduced the duty on Palm oil by Rs. 40 in 4QFY17,” according to Managing Director Vish Govindasamy in his report released along with the annual report on May 24.
Tea, the report said, was faced with adverse weather and depressed market conditions during the first half of the financial year. However with the improved tea prices and conducive weather conditions in second half of the financial year, the company has been able to register a profit of Rs. 24 million during the year in a period when the net sale average has been consistently above the market average due to enhanced quality standards maintained by all the tea factories.
The export sector registered a profit of Rs. 47 million in comparison to Rs. 64 million recorded in FY16. The reduction in profitability was a result of the lesser number of orders received from overseas buyers as a result of re-structuring of order placement process to be more competitive in the tea market segment, the report said.
Mr. Govindasamy said the company has created history by reaching the milestone of achieving the highest profitability by any RPC since privatisation which augurs well for future investments in the plantation sector. “The company continues to enhance the quality in teas and increase in palm oil yields while exploring opportunities for business diversification,” he said.