Mar 08, 2010 (LBO) – Drought and higher wages pushed Sri Lanka’s Talawakelle Tea Estates into the red last year, its first loss, although a recovery in crop and higher prices in the last quarter helped reduce losses. The firm, a unit of the Hayleys group, said it made a 22.3 million loss in the 2009 financial year ending December 31, compared with a profit of 109 million the year before.
Group revenue rose 14.3 percent to 2.59 billion rupees in 2009. The firm made a loss per share of 0.94 rupees compared with basic earnings of 4.60 rupees in 2008.
Chairman Mohan Pandithage said the year under review was possibly the worst since the firm’s privatisation in 1998.
“The loss for the year, the first reported, can be attributed to drought conditions that significantly affected tea production, and the increase in wage cost.”
The 42.5 percent wage hike for estate workers in a deal with unions in September 2009, which became effective from April 1, along with related gratuity liability, cost the company 303.8 million rupees.
“Remunerative prices, worker productivity and favourable weather will prove to be critical in the coming year,” Pandithage told shareholders in the annual report.