Sri Lanka Tata unit shrugs off wage hike cost

Nov 06, 2009 (LBO) – Sri Lanka’s Watawala Plantations said September quarter group net profit fell 78 percent to 9.4 million rupees from a year ago but commodity prices were seen strong with a global economic recovery. The firm, a unit of India’s Tata group, said in a stock exchange filing that sales during the September quarter rose 28 percent to almost 1.3 billion rupees.

Net profit in the six months ending September 30 halved to 47 million rupees from the year before with Watawala chairman G Sathasivam saying the firm remained profitable despite higher wage costs owing to a diversified business portfolio.

The company produces tea, rubber, and palm oil and is also into local retail marketing and exports of branded teas.

But profit from exports was much lower than the previous year.

“Despite the recent estate wage hike, which increased worker remuneration by 39.6 percent, your company was able to report a modest profit,” he told shareholders in a statement accompanying the accounts filed with the stock exchange.

“This commendable result was largely due to your company’s balanced portfolio of product range covering tea, palm oil and rubber together with its retail and export business segment