Sri Lanka Horana tea estate profits up on better prices

Feb 05, 2013 (LBO) - Profits at Sri Lanka's Horana Plantations Plc, which mainly grows tea rose almost trebled to 100 million rupees in the December 2012 quarter from a year earlier, on stronger tea prices.

 The firm reported earnings of 4.03 rupees per share for the quarter. In the nine months to December earnings were 6.14 rupees per share on profits of 153 million rupees which rose 692 percent.

 The stock traded at 26.20 rupees on Tuesday, up 1.20 rupees.

Sri Lanka's tea auction prices have risen in 2012 partly helped by a depreciation of the rupee against the US dollar of around 15 percent.

The firm said revenues rose 19 percent to 623 million rupees in the December quarter, and cost of production rose at a slower 5.0 percent to 481 million rupees, giving gross margins of 142 million rupees up 120 percent.

Sri Lanka's rupee fell in 2012 after large volumes of bank loans were taken by state enterprises in the preceding months to manipulate energy prices, which were ultimately accommodated with central bank credit.

After falling to 134 to the US dollar from 110 the rupee by mid 2012 the rupee recovered to around 127 to the US dollar by the year-end.

Last week the state also suddenly slapped an export tax on tea with no prior warning drawing protests from the industry.

source - www.lbo.lk