Jan 31, 2011 (LBO) - Sri Lanka Watawala Plantations December 2010 quarter profit rose three percent to 189 million rupees from a year ago with group sales stagnant at 1.7 billion rupees, a stock exchange filing said.Earnings per share for the company, a unit of India's Tata Tea group, were 0.80 rupees compared with 7.71 rupees the previous year, before a one into ten share split in September 2010.
Watawala group's nine months profit rose 82 percent to 418 million rupees on high prices for tea and rubber with an eight percent rise in sales to 4.5 billion rupees.
"The performance of tea was encouraging which bettered the performance of the previous period by improving on the bottom line by 44 percent," managing director Vish Govindasamy said in a note accompanying the results.
"Increased production coupled with better agricultural practices and better prices in comparison with the market elevation averages were the main contributory factors."
Govindasamy said "exceptionally high" rubber prices have significantly increased the profitability of the group's rubber business, which contributed 80 million rupees profit compared to a loss of 7.5 million in the same period the previous year.
"The average prices during the nine months improved by 80 percent," he said.
"The company will be in a position to capitalize on this situation and report a better performance in the next quarter subject to good weather conditions."
Watawala group's oil palm business made a profit of 168 million rupees, marginally lower than the previous period as production fell owing to unfavourable weather conditions.
" . . . but with improving prices due to global supply shortages, profitability was maintained," Govindasamy said, warning however that this trend would ease towards the end of the financial year.
The company continues to benefit from its partnership with Tata Global Beverages (formerly Tata Tea) with increasing support for exports of bulk and value added tea to Tata and their clients, he said.
Exports of the company to Australia are now handled by Watawala Marketing, a fully owned subsidiary which was formerly the group's fast moving consumer goods division.
The company has had a "remarkable" nine months ended December 2010, with a net profit of 157 million rupees, up 43 percent from the previous period, Govindasamy said.
"Overall, your company has performed much better than the previous period and it is expected that this trend would continue till the end of the financial year," he told shareholders.
Govindasamy said he will reveal the firm's future plans when it announces final results on completion of the financial year.
source - www.lbo.lk
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