Bogawantalawa Tea Estates has recorded a 159 percent increase in profits before tax and a 150 percent increase in profit after tax vis-a-vis 2008/09 financial year.
Accordingly in 2009/10 year it recorded a profit before tax of Rs 134 million and the earnings per share works out to Rs 2.26 per share.
Despite the Sri Lankan national tea production reducing by 9 percent to 290 million kgs from the previous year, the annual tea production of the company recorded an increase from the previous year figure of 7.95 million kgs to 8.16 million kgs.
The company has also realized an overall net sale average of Rs. 362.22 per kg during the year in consideration against Rs. 273.68 of last year, recording a 32 percent increase. However, the cost of production for 2009/10 year was Rs 331.21 per kg against Rs 271.31 last year. This increase was mainly due to higher prices paid for green leaf, increased wages and escalated fuel and fertilizer prices.
Bogawantalawa Tea Estates Chairman, D J Ambani said “the company managed to record a 150 percent growth in after tax profits and ploughed back Rs 203 million on the capital development program during the financial year”.
Ambani said key issue to be addressed by the regional plantation companies is the capital formation methodology to further invest in areas such as tea planting, soil building and agro-forestry and the marketing efforts in a sustainable manner, if Sri Lanka to compete aggressively in the global tea market.
He further stated that an active intervention from government in developing the bond market would definitely ease the financial burdens of the tea industry.
The company has made a considerable progress due to consistent marketing efforts which increased the market share especially in highly competitive markets such as US, Holland and Lithuania.
The company continues to focus on diversification strategies such as eco-friendly leisure projects, mini hydro power projects, dairy farming, and forestry projects to maximize revenues from non-core business initiatives.
“This is where an innovative method of raising funds by way of a long-term bond issue will come into play to address the much needed capital formation issue”, the Chairman said.
source - www.dailynews.lk
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