Lanka Walltile group performance up despite losses in plantations

Lanka Walltile PLC, despite a challenging outlook for the economy, and a less condusive business environment for private enterprise growth, has shown a satisfactory performance for 2006/2007.

According to the Group Chairman, Anthony Page, the 2006/2007 Annual Report shows the turnover of the group at Rs.5,780 million, up 17.8% increase from Rs.4,907 the previous year. Moreover, Group profit after tax was a healthy Rs.375 million which was a 31% increase over 2006. The company profit after tax was Rs.152.6 million against the previous year's profit of Rs.131.6 million.

Page said the ceramic sector performed creditably during the year with Lanka Walltile PLC and Lanka Tiles Ltd (LTL), the majority shareholder, reporting 16% and 33% growth in net profit, respectively. The reported growth was in the backdrop of rapid increase in energy prices during the year. Consequently, the cost of energy as a percentage of total cost increased to 31% in 2007 from 25% the previous year. "However, the group was able to recoup this increase through price revisions that enabled stability of margins," Page said. He also noted that although a lull in large residential and commercial developments was observed, home-building continued unabated and helped sustain demand for the product manufactured by this sector of the Group.

Horana Plantations Ltd has recorded a profit of Rs.7.68 million for the first quarter of 2007/2008 which is 78.55% below that of the corresponding period the previous year. Page said the decline in profitability has been due to poor crop and an increase in cost bases due to the wage hikes and increases in costs of other related inputs.

However, he remains hopeful that with the rubber markets remaining strong, together with a recovery in the crop levels of the high grown teas, the last two quarters will bring in sufficient profitability to better the previous year's results. (NG)