MARKET DEVELOPMENT
Sunshine Group’s Watawala Plantations Profits Down 92.3%
Sunshine Group’s Watawala Plantations Profits Down 92.3%
01/08/2013 (The Island.lk) - Watawala Plantations PLC (WATA) – a member of the Sunshine Group, has posted a 14 percent growth in revenue (YoY) to report Rs. 1.5 billion for the first quarter ended June 30, 2013. WATA posted a PAT of Rs. 11.4 million, down 92.3 percent compared to a PAT of Rs. 147.5 million posted during the same quarter last year. "In a wage impact year, contrasting unhealthy weather pattern, which prevailed during the 1st quarter, was the most critical factor impacting profitability," the company said in a statement releasing its interim financial results.
Strong Palm Oil performance has mitigated the severe loss in the Tea segment, which was largely driven by one of the worst weather conditions during the 1st quarter of the FY 2013/14.
The wage increase coupled with additional provision for gratuity both came into effect from April 1st2013, had a significant impact on the cost of production across all crops.
Tea production was significantly affected by the continuous rains experienced in the upcountry area resulting in a higher cost of production. During the quarter under review, in the Hatton/Watawala/Lindula regions, the average number of wet days recorded were 59 days and the rainfall was recorded at 1,950 mm. In comparison, for the same period last year (YoY) the wet days was 28 days and the rainfall was recorded at 1,212 mm.
The production of palm oil grew by 14 percent YoY despite adverse weather conditions, a result of excellent agricultural practices which are in place today. Despite a 14 percent increase in production, revenue increased only 4 percent due to fluctuating Crude Palm Oil prices. Palm Oil is the highest contributor to the Group’s profit, posting a profit of Rs. 146 million against Rs. 163 million during the same period last year.
The present market for Palm Oil shows an improvement.
The tea sales grew by 13 percent to reach Rs. 1.0 billion compared to Rs. 919 million recorded in the first quarter of 2012/13 backed by higher sales volumes recorded in the current season. The wage/gratuity impact along with the adverse weather conditions had a significant impact on the cost of production of tea. Thus, tea sector recorded a loss of Rs. 156 million as against the loss of Rs. 8.2 million for the same period last year.
Rubber recorded a loss of Rs 11.9 million in Q1 2013/14 compared to a profit of Rs 1.1 million during the first quarter of the previous financial year. This was primarily due to lower production due to continuous rains, which prevailed from mid of May 2013. The productions of rubber dipped 39 percent YoY. The rubber prices have dropped by LKR 53/kg compared to same period last year.
A member of the Sunshine Enterprise, 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 Palm Oil, Tea & Rubber with a workforce of approximately 12,000 people. The company has the largest Palm Oil plantation and the largest Rubber factory in Sri Lanka to augment the production of more than 9 million kgs of Ceylon tea annually.
Strong Palm Oil performance has mitigated the severe loss in the Tea segment, which was largely driven by one of the worst weather conditions during the 1st quarter of the FY 2013/14.
The wage increase coupled with additional provision for gratuity both came into effect from April 1st2013, had a significant impact on the cost of production across all crops.
Tea production was significantly affected by the continuous rains experienced in the upcountry area resulting in a higher cost of production. During the quarter under review, in the Hatton/Watawala/Lindula regions, the average number of wet days recorded were 59 days and the rainfall was recorded at 1,950 mm. In comparison, for the same period last year (YoY) the wet days was 28 days and the rainfall was recorded at 1,212 mm.
The production of palm oil grew by 14 percent YoY despite adverse weather conditions, a result of excellent agricultural practices which are in place today. Despite a 14 percent increase in production, revenue increased only 4 percent due to fluctuating Crude Palm Oil prices. Palm Oil is the highest contributor to the Group’s profit, posting a profit of Rs. 146 million against Rs. 163 million during the same period last year.
The present market for Palm Oil shows an improvement.
The tea sales grew by 13 percent to reach Rs. 1.0 billion compared to Rs. 919 million recorded in the first quarter of 2012/13 backed by higher sales volumes recorded in the current season. The wage/gratuity impact along with the adverse weather conditions had a significant impact on the cost of production of tea. Thus, tea sector recorded a loss of Rs. 156 million as against the loss of Rs. 8.2 million for the same period last year.
Rubber recorded a loss of Rs 11.9 million in Q1 2013/14 compared to a profit of Rs 1.1 million during the first quarter of the previous financial year. This was primarily due to lower production due to continuous rains, which prevailed from mid of May 2013. The productions of rubber dipped 39 percent YoY. The rubber prices have dropped by LKR 53/kg compared to same period last year.
A member of the Sunshine Enterprise, 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 Palm Oil, Tea & Rubber with a workforce of approximately 12,000 people. The company has the largest Palm Oil plantation and the largest Rubber factory in Sri Lanka to augment the production of more than 9 million kgs of Ceylon tea annually.