Sri Lanka wage hike sends listed estate into the red

Nov 04, 2009 (LBO) – Sri lanka’s Kelani Valley Plantations (KVPL) said a wage hike wrested by estate labour unions has sent it into the red in the September 2009 quarter. The company, which has been recovering from a severe drought earlier in the year, said that it made a loss of 217 million rupees in the quarter compared with a net profit of 61 million rupees a year ago.

A statement by the company, part of the Dipped Products rubber gloves arm of the Hayleys group, said revenue fell 18 percent to 699 million rupees in the period.

The firm made a net loss per share of 6.37 rupees compared with earnings of 1.80 a year ago.

“The company would have posted a reasonable third quarter result despite the erratic weather, if not for the substantial wage hike,” KVPL Managing Director Kavi Seneviratne said.

“Weather conditions and prices have improved in the current quarter, and we expect to reduce our losses by the end of the year.”

Plantations unions staged a ‘go-slow’ in September, disrupting transport of tea from hill-country estates to back demands for a wage hike.

KVPL said in a stock exchanging filing that the wage hike agreement, signed in S