31/10/2012 (LBT) - The Plantation arm of Sunshine Holdings, Watawala Plantations PLC (CSE: WATA), recorded a PAT of LKR 186 million for Q2 2012/13 compared to a loss of LKR 16.8 million reported in the same period a year ago.

The Tea sector, which accounted for 65% of the turnover of the company for Q2 showed a much-improved performance with a 12% increase in production to 2.07 million kgs compared to the same quarter a year ago. The Net Sale Average of tea showed a LKR 103.38 improvement (against Q2 a year ago) and several cost reductions and improved agronomical practices implemented by the company, now appear to be showing results.

Rubber production fell by 38% to 108,460 kgs over the same period last year and the Net Sale Average dipped by LKR 183.25 (against Q2 a year ago), thus creating a marginal loss in Q2 of LKR 5.1 million. The wet weather reported in Udugama, which accounted for 22 wet days in September resulted in the lower productivity.

Palm Oil continued to be the highest profit earner for the company with a profit of LKR 188 million in Q2. With the Palm Oil production improving by 15% to 2.2 million kgs against same period a year ago, with higher yields being recorded.  The Net Sale Average continued to improve, up LKR 26.58 (against Q2 a year ago), which also contributed to an improvement in profitability by 61% against the same quarter a year ago. The company has now been able to improve the productivity of the refined palm oil which has further enhanced the Palm Oil profitability.

Overall, the company has had a much-improved cash flow supported by the re-structuring strategy, which took place during Q4 of 2011/12.  As a result the company reported a reduction of 51% in Finance Costs for H1 2012/13 when compared the same period a year ago, which amounted to LKR 21 million, despite a steady increase in interest rates during the first half of the financial year.  Revenue for H1 2012/13 increased 18% to LKR 2.7 billion compared to H1 2011/12 of LKR 2.2 billion. PAT for H1 2012/13 was 343 million compared to a loss of 37 million for the same period a year ago.

A member of the Sunshine Group, Watawala Plantations PLC is a diversified plantation company in Sri Lanka, managed by the Group’s subsidiary, Estate Management Services Pvt. Ltd., a joint venture with the TATA Global Beverages Ltd.  The company manages a total land extent of over 12,000 Ha in Tea, Palm Oil and Rubber with a workforce of over 12,000 people.  The company has the largest Palm Oil plantation and the largest Rubber factory in Sri Lanka to augment an annual production of more than 9 million kgs of Ceylon tea.