Sri Lanka Finlays plantations firms make losses in June quarter
ECONOMYNEXT – Two regional plantations companies owned by the Finlays group have both reported losses in the June 2015 quarter owing to the continuing slump in tea and rubber prices.
Hapugastenne Plantations made a loss of 46 million rupees in the June 2015 quarter compared with a profit of 81 million rupees a year ago, a stock exchange filing said.
Sales of the firm fell 12 percent to a billion rupees. The firm made a loss per share of one rupee in the June 2015 quarter compared with earnings of 1.76 rupees the year before
Udapussellawa Plantations made a loss of six million rupees in the June 2015 quarter compared with a profit of 71 million rupees the year before.
The firm’s sales rose 31 percent to 551 million rupees. The loss per share was 31 cents in the June 2015 quarter against earnings of 3.67 rupees the previous year.
James Finlay Plantation Holdings has majority stakes in both plantations companies.
Hapugastenne Plantations chairman Naresh Ratwatte said the firm’s results during the period from January to June is “an accumulation of the difficult trading environment in both tea and rubber as a result of the political and economic instability and the sanctions imposed on our main markets.”
In addition, he said, the “erratic weather conditions continue to hamper the much wanted leaf intakes.”
Ratwatte said Colombo auction prices for both tea and rubber continued to plummet during the period under review.
“Although the industry was optimistic and did have expectations of some relief in tea prices since the agreement between US and Iran was confirmed, this was not to be as the prices continue to drop week on week into July and we expect the balance half of the year too to be a buyers’ market and not the growers,” said Ratwatte.
Udapussellawa Plantations had reclaimed four estates in Ragala Group in August 2014 whose losses contributed to the company’s overall loss, Ratwatte said.
“These four estates are responding well to the change of management and we see encouraging improvements in efficiencies,” he said.
“We are confident that we will see improved results and turn around to profitability when the tea prices re-stabilize.”
(Colombo/August 11 2015)