July 26, 2007 (LBO) – Bogawantalawa Tea Estates Ltd. has reported loss last year but its marketing subsidiary, about whose viability auditors have raised doubts, has made a breakthrough in overseas markets with contracts to pack teas for private labels. Bogawantalawa Tea Estates reported a group net loss of 121.6 million rupees for the year ended March 31, 2007 compared with a net profit of 20 million rupees the year before.
Bogawantalawa Tea Estates chairman D J Ambani attributed the loss to the wage hike wrested by labour unions with a strike last year, higher energy costs coupled with low plucking norms and higher lease rentals.
Group revenue eased to 2.43 billion rupees from 2.42 billion.
The firm™s auditors have drawn attention to the ability of its marketing subsidiary BPL Teas to continue as a going concern with accumulated losses amounting to 143 million and total liabilities exceeding total assets by 17 million rupees.
However, the directors said in the company annual report that BPL Teas can continue as a going concern with proposed cost cutting measures, enhanced brand promotion and continued financial backing from the parent firm.
Company officials said BPL Teas had started making operating profits.