Mar 31, 2010 (LBO) – Sri Lanka’s Malwatte Valley Plantations said 2009 annual profits fell 99.3 percent to 2.15 million rupees from a year ago with a big loss in the December quarter on higher wage costs and gratuity provisions. Its financial results filed with the Colombo stock exchange showed December quarter losses shot up 65.5 percent to 345.3 million rupees from the year before following a wage hike wrested by tea estate unions.
Malwatte Valley Plantations December quarter revenues were up 85.1 percent to 647.8 million rupees, while cost of sales rose 93.7 percent to 974 million, resulting in a gross loss of 326.1 million rupees, up 113.4 percent from the previous year.
A larger wage bill and gratuity payments in 2009 has driven up costs higher than revenue increases, K P M Piyaratne, finance director at Malwatte Valley Plantations told LBO.
Malwatte provided 210 million rupees to cover gratuity and holiday payments, its accounts showed.
“We can’t pass all costs to buyers, it’s practically impossible,” Piyaratne said.
“If we increase prices too high the buyers will go elsewhere.”
The loss in the December quarter came despite high tea prices owing to a global shortage and rising consumer d