Sri Lanka Watawala Plantation profit from palm oil

Oct 25, 2012 (LBO) – Sri Lanka’s Watawala Plantations said it made profits of 186 million rupees in the September 2012 quarter, turning around from a loss of 16.8 million rupees helped by palm oil.

The firm reported earnings of 79 cents per share for the quarter. For the six months to June 2012, the firm reported earnings of 1.46 rupees on profits of 343 million rupees, in interim accounts filed with the Colombo Stock Exchange.

The stock traded at 12.30 rupees down 10 cents at mid-day Thursday.

In the three months to September revenues rose from 1.0 billion rupees to 1.37 billion rupees while cost of sales rose from 992 million rupees to 1,091 million rupees, allowing the firm to grow gross profits to 286 million rupees from 10.9 million rupees.

In the six months to September, gross profits rose from 0.8 million rupees to 501 million rupees.

Managing director Vish Govindasamy said production of tea, which was 68 percent of revenues fell 4 percent, but prices had improved and cost reductions and better “improved agronomical practices” seemed to be paying off.

Rubber production had dropped 23 percent in the six months and the net sale average had fallen by 181.46 rupees a kilogram generating a marginal loss, the firm said.

Wet weather in the Udagama area over 22 days in September had hit production.

Palm oil had brought profits of 342 million in the six months to September and with yields rising and net sales averages also up.

“The company has now has been able to improve the productivity of the refined palm oil which has further enhanced the Palm Oil profitability,” Govindasamy said.

The firm said finance costs also fell. The group sold a tea brand marketing firm to a related party in a controversial deal, bringing in cash.