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Sri Lanka Tata Tea unit reports lower June quarter profits

August 22, 2007 (LBO) – Sri Lanka's Watawala Plantations plc, a unit of India's Tata Teas, said net profit for the quarter ended June 2007 fell 24 percent to 35 million rupees compared with last year. Revenue rose to 917 million rupees from 802 million the year before, according to interim results released by the company.

A breakdown of operating profits from different business segments revealed that while tea was the main revenue generator, bringing in revenue of 533 million rupees, it made an operating loss of 32.9 million.

Watawala's rubber sector earned a profit of just over a million rupees on revenue of 34.8 million rupees.

Tea prices rose sharply earlier this year but plantations firms were hit by a severe shortfall in production owing to last year's strike and go-slow by unionised labour.

This was particularly felt because the Western quality season at the start of the year, when tea firms with high grown estates on the Western slopes of the island's central massif make good money, was affected.

Also, the wage hike wrested by labour unions is beginning to bite while the plantation firms have had to cope with rising energy costs.

The company has been enjoying go

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