May 13, 2012 (LBO) – Profits at Sri Lanka’s Balangoda Plantations, a unit of listed Distilleries Corporation fell 49 percent to 67 million rupees in the March 2012 quarter, hit by falls in rubber sales, interim accounts showed. The firm also paid 19 million rupees in management fees down from 52 million a year earlier.
The firm reported earnings of 2.85 rupees for the quarter. In the year to December it only made profits of 16.7 million rupees.
Revenues during the March quarter fell 3 percent to 745 million rupees and cost of sales rose 9.3 percent to 658 million rupees sending gross margins down 49 percent to 87 million rupees.
The firm gets most of its revenues from growing tea, a labour intensive products where margins are thin. But it also has rubber which is a high margin product whose prices are strong.
Balangoda Plantations said revenues from tea grew to 616 million rupees from 559 million and gross profits rose to 38.7 million rupees from 24.9 million rupees.
But rubber sales fell to 129 million rupees from 214 million rupees a year earlier, indicating production was down. Gross profits from rubber fell to 48 million rupees from 147 million rupees.