Sri Lanka nut shortfall hits Renuka Agri profits

Sep 06, 2011 (LBO) – High coconut prices caused by a crop shortfall reduced profits at Renuka Agri Foods last year although exports increased. Net profit fell 20.5 percent to 144 million rupees in the year ended March 31, 2011 from 181 million rupees the year before with earnings per share falling to 36 cents from 57 cents.

Sales rose 12 percent to 1.2 billion rupees from a billion rupees the year before, according to the company’s annual report.

The firm’s net profit margin fell to 11.76 percent from 16.62 percent the year before.

“We faced an increase in raw material prices arising from shortages due to poor harvest of coconut which is our main raw material,” Renuka Agri Foods chairman S R Rajiyah told shareholders.

“This has resulted in a dip in profitability. However, our continuous efforts to increase productivity and efficiency in the value chain resulted in us maintaining reasonable margins.”

Coconut products like coconut milk powder, canned coconut milk, creamed coconut, defatted coconut and coconut water in both conventional and organic forms are the firm’s main exports.

It also exports tea in bulk, packe