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In the three months to June revenues declined from 1,880 million rupees to 1,685 million rupees while cost of sales also dropped marginal 3 percent to 1,483 million rupees. Gross profits eased to 202 million rupees from 354 million rupees. Palm Oil segment registered a revenue growth of 24 percent year on year to reach 469 million rupees in 1QFY16.
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The growth in revenue in the palm oil segment is primarily due to a sharp increase in Crude Palm Oil production, while net sale average marginally contracted compared to the corresponding period last year, consequent to a drop in global palm oil prices. “The segment made a significant contribution to company’s profitability, having made a net profit of 227 million for 1QFY16,” Vish Govindasamy, managing director of Watawala Plantation, told shareholders.
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Tea segment reported a revenue of 1.1 billion rupees June quarter compared to 1.
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3 billion rupees last quarter. Net loss for the quarter was 137 million rupees compared to net profit of 32 million reported in the comparative quarter last year. “The decline in the tea sector performance is attributed to a drop in NSA consequent to sharp decrease in the Colombo tea auction prices, and increase in cost of production due to decrease in production,” Govindasamy said.
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“Company continues to enhance the quality of its teas in order to gain a price advantage, while continuing to increase the palm oil yield,” “Biennial wage negotiations are currently underway as the collective agreement between the Plantation Companies and Trade Unions lapsed on 31 March 2015. The new wage agreement, when agreed between the parties, will be effective retrospectively from 1 April 2015.” The rubber segment which only accounted for 0.8 percent of the total revenue in 1QFY16 report at a net loss of 17 million rupees compared to 24 million rupees recorded in the same quarter last year. Losses were curtailed by the reduction of the rubber extent by design, Govindasamy told shareholders.
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