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Wednesday, May 25, 2011

Watawala profits up 51% to Rs.642 mn

Watawala Plantations Plc releasing its results for the 12 months ended 31 March 2011 period said that the plantation group has recorded the highest ever net profit during the year.

The net profit rose 51 per cent to Rs.642 million from a year ago while the annual earnings per share increased to Rs.2.70 from from Rs.1.80 in the previous year.

According to the company’s Managing Director, Vish Govindasamy, the performance of Tea was encouraging which bettered the performance of the previous period by almost 77%. “Increased production coupled with better agricultural practices, better NSA’s in comparison with the elevation averages were the main contributory factors. Also the company was able to keep the COP lower than the previous year.

Waltrim Estate in the Lindula region which now has a “State of the Art” factory has re-established its mark in the region by fetching high prices” Govindasamy said.

The tea operations of the company earned Rs.35 million in net profit for the year.

Watawala MD also said that increased Rubber prices due to a mismatch in the supply and demand in the local as well as in the International Market have shown a remarkable increase in the profitability of the segment to Rs.140 million from a mere Rs. 2 Mn last year. “The average NSA during the nine months improved by 80 per cent. The profits would have been much higher if not for the poor weather that prevailed in the last quarter of the year” he said.

The Palm Oil segment of the company once again proved to be the key contributor to the company’s profit ending the year with a profit of Rs. 165 million. However there was a drop of over Rs. 100 Mn in profits due to a reduction in Oil. This is due to a drop in crop of oil palm worldwide and further was due to the after effects of the drought that prevailed in early 2009. Watawala Marketing Ltd., the Companies fully owned subsidiary Watawala Marketing (Pvt) Ltd., continued to market its products Zesta, Watawala Kahata, Ran Tea, Zest Mineral Water and Oliate Vegetable Oil. The Company reported a Net Profit of Rs. 232 million which is a 118% growth over the net profit of the previous period.

The wage negotiations of the plantation workers are taking place at the moment and industry analysts believe that future profitability of the plantation companies depends on the outcome of the said negotiations.

source - www.dailymirror.lk