Sri Lanka bought leaf tea factory net down 68-pct

Nov 07, 2011 (LBO) – Profits at Tea Smallholder Factories Plc, a unit of Sri Lanka’s John Keells Holdings fell 68 percent to 8.3 million rupees in the September 2011 quarter from a year earlier, amid falling revenues. Tea Smallholder Factories Ltd is 37.6 percent owned by John Keells Holdings, 24.3 percent by Akbar Brothers and 22.8 percent by Central Finance.

The firm reported earnings of 28 cents for the quarter. For the six months to September there was a marginal loss of 825,000 rupees and loss per share of 3 cents.

The firm said revenues fell 20 percent to 481 million rupees in the September quarter. Gross profits were down a steep 57 percent to 29.5 million rupees.

Green leaf bought from smallholders is paid on a formula based on the selling price of made tea. When tea prices are on a declining trend, bought leaf factories get hit to due to lag effect.