The recent estate wage hike has eroded the gains of the second quarter of Kelani Valley Plantations PLC (KVPL) and saddled the Dipped Products Group’s plantation company with a net loss of Rs 220.8 million for the nine months ending 30th September 2009, KVPL said.
The full impact of the wage increase implemented in September with retrospective effect from April 1, 2009 on the company’s bottom line for the period reviewed was Rs 290 million, inclusive of back wages and gratuity provisions, the company said in a press release. In addition, substantial crop losses in both tea and rubber due to adverse weather conditions during much of the period resulted in lower revenues from the company’s principal commodities and exerted further pressure on the bottom line. KVPL reported that turnover declined 26 % to Rs 1,863 million at the end of the third quarter from Rs 2,522.6 million for the corresponding nine months of last year.
The company posted a loss before tax of Rs 215 million for the period reviewed. KVPL’s tea production volume fell by 25 % in the nine months under review whilst rubber production declined by 15 %t, KVPL Managing Director Kavi Seneviratne said.
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