Publicly-listed Sri Lankan tea, rubber and palm oil concern Watawala Plantations has reported its "highest profit ever amounting to Rs. 642 million" in terms of group net profit for the 12 months to end-March 2011, up 51% year-on-year, according to its Managing Director, Vish Govindasamy, quoted in a recent Colombo Stock Exchange filing. Also revealed, group revenues grew to Rs. 6.15 billion, a year-on-year increase of approximately 9%, while group cost of sales remained virtually static.
At the same time, group net profit for the three months to end-March 2011 was Rs. 224 million, a year-on-year rise of 12%.
According to Mr. Govindasamy, tea performance improved by close to 77% as a result of increased production and better net sales averages (NSA) prices as well as a lower cost of production (COP). However, group financials showed that, overall, Watawala's tea business showed a Rs. 35.27 million loss. This was despite a revenue of Rs. 3.59 billion.
Further, he also noted that, "due to a mismatch in the supply and demand in the local as well as in the international market" which led to increased rubber prices, group net profits were elevated to Rs. 140 million compared to just Rs. 2 million the year before, He also revealed that NSA prices improved by 80% over the first nine months of the financial year up to end-March 2011, and further improvement was forthcoming if not for poor weather experienced over the last three months of the financial year. Additionally, group rubber revenue was reported as Rs. 334.72 million.
However, it was palm oil which "once again proved to be the key contributor" to profitability, according to Mr. Govindasamy. This was despite a "drop in crop of oil palm worldwide and further was due to after effects of the drought that prevailed in early 2009" which eroded company profitability to the tune of Rs. 100 million. Palm oil group revenue for the year was Rs. 701.67 million. |
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