COLOMBO, Nov 25, 2014 (EconomyNext) - Watawala Plantations, in which two Asian tea and oil palm firms have big stakes, said September 2014 quarter net profit fell 64 percent to 31 million rupees from a year ago.
Earnings per share fell to 13 cents from 37 cents the year before while sales rose 31 percent to 1.8 billion rupees.
For the six months to September 2014, EPS went up 1.11 rupees from 42 cents the previous year with sales up 28 percent to 3.7 billion rupees
Sales is mainly of tea and almost a quarter of palm oil.
Watawala Plantations Managing Director Vish Govindasamy said growth in profitability in the half-year was primarily driven by growth in the oil palm sector while the firm managed to curb losses in tea.
Palm oil revenue grew seven percent to 822 million in the first half while tea revenue grew 38 percent to 2.5 billion rupees.
The rubber sector, which accounted for approximately one percent of the company’s revenue, recorded a drop of 39 percent to post loss of 40 million rupees from the previous year.
"Watawala continues to be the single largest CPO (Crude palm Oil) producer in Sri Lanka at 4.6 million kg for 1HFY15, up six percent year-on-year," Govindasamy said.
"The segment continued to maintain its position as the highest contributor to company profitability, having made a gross profit of 480 million rupees for 1HFY15 which is an increase of 18 percent compared to 1HFY14.
"Net profit before tax was 430 million rupees compared to 325 million rupees in 1HFY14. This came on the back of better yields as a result of good agricultural practices, and new fields which came into bearing in the current season."
Palm oil Net Sale Average was up 18 rupees to 179 rupees from a year ago.
The firm's tea business losses before tax fell to 154 million rupees in 1HFY15 from a net loss of 234 million in 1HFY14 although overall volumes increased to 5.29 million kilos from 4.33 million kilos in 1HFY14.
TATA Global Beverages, the world's second largest tea company, and Pyramid Wilmar Plantations, one of Asia’s largest agribusiness groups headquartered in Singapore, hold big stakes in Watawala Plantations.