Sri Lanka bought leaf tea factory makes loss

Jan 24, 2011 (LBO) – Sri Lanka’s Tea Smallholder Factories Plc, a unit of John Keells Holdings said it lost a million rupees in the December 2012 quarter compared with a 41 million a year earlier, as revenues fell. . Revenues fell 17 percent to 510 million rupees in the quarter while cost of sales fell at a slower 11 percent 498 million rupees, shrinking gross profit to 12.4 million rupees from 57.8 million rupees a year earlier.

Other operating income rose to 13.8 million rupees from 5.1 million but finance costs rose to 3.5 million rupees from 1.6 million.

The company runs factories in several locations using tea bought from smallholder growers. Smallholders are paid on a formula based on auction prices with a time lag.

In the December quarter only its division in Galle made operating profits of 56 million rupees on revenues of 820 million rupees.