Sept 01, 2009 (LBO) – Sri Lanka’s Ceylon Tea Services, which exports value-added teas under the Dilmah brand, said net profit halved last year and sales are likely to remain poor this year owing to recession. Group net profit in the year ended March 31, 2009 fell 55 percent to 487 million rupees from a year ago while sales rose 1.8 percent to 4.4 billion rupees, the company said in a stock exchange filing.
Earnings per share fell to 24.36 rupees from 53.74 over the period.
Ceylon Tea Services chairman Merrill Fernando attributed the fall in profit to currency fluctuations in its key Australian market and lower demand for its branded high-priced tea products.
Fernando said “a significant decline in the value of the Australian currency severely hurt our bottom line.”
The steep fall in value of the Australian dollar from 0.98 cents to the US dollar to 0.64 cents between the period August 2008 and March 2009, had a “serious impact on profitability.”
If not for this reversal, profits would have matched the previous year™s level, Fernando told shareholders in the firm’s annual report.
During the second half of the year, the slow down in the economy impacted on sales turnover, rev