Oct 23, 2007 (LBO) –Hayleys subsidiary Talawakelle Tea Estates has reported a sharp fall in profits up to September this year as it struggles to recover from the effects of a strike which crippled production late last year and bad weather.
Production fell even after the strike as estates were forced to prune and discard overgrown tea bushes and bushes could not recover as there was little or nor rain thereafter, brokers said. Net profits in the nine months ended September 30, 2007 fell 86 percent to 16 million rupees, the company said in a statement on its interim results to the Colombo Stock Exchange.
Turnover fell to 1.28 billion rupees from 1.35 billion rupees.
The company makes the best profits in the first quarter during the western high grown quality season when teas from the western slopes of the central massif fetch their highest prices.
But this year cropping was affected by the effects of the strike by workers demanding higher wages which was followed by bad weather.
The strike sharply reduced the tea available to be sold at the Colombo auctions.
Talawakelle Tea Estates produces quality high grown teas and has some well known estates like ˜Great Western™ and ˜Mattakelle™.