COLOMBO (EconomyNext) – Sri Lanka’s Watawala Plantations said net profit for the December 2014 quarter fell 20 percent to 147 million rupees from a year ago with earnings from palm oil compensating for losses from tea and rubber.
Earnings per share fell to 62 cents in the quarter from 90 cents the year before. December 2014 quarter sales fell four percent to 1.6 billion rupees as unseasonal rains reduced tea and rubber crops.
In the nine months to December 2014 net profit went up 31.6 percent to 409 million rupees and EPS rose to 1.73 rupees from 1.31 rupees compared with the year before, a stock exchange filing said.
According to a segmental analysis for the nine months, revenue from tea increased but losses rose to 209 million rupees from 197 million and losses from rubber rose to 63 million from 10 million rupees.
However, palm oil profits of Watawala, which is controlled by India’s Tata Global Beverages and Singapore’s Pyramid Wilmar Plantations, rose to 593 million rupees from 465 million rupees during the period.
Managing Director Vish Govindasamy said Watawala Planations was able to post strong bottom line performance in a challenging environment for the plantation sector due to a better than expected performance in palm oil.
Govindasamy said he expects the palm oil segment to continue its strong performance and be the key driver for company profitability.
"The palm oil segment, which is the highest contributor to the company profits, contributed 593 million rupees to the group bottom line in the first nine months, up 27.7 percent, from a year ago," he said.
Revenue grew 9.1 percent owing to a 6.3 percent increase in crop which amounted to 6.94 million kilos.
"We attribute the increase in crop to better, and new fields," Govindasamy said.
Sales from tea, the largest revenue contributor which accounted for over 67.9 percent of the total revenue, increased 22.4 percent to 3.6 billion rupees from the previous year mainly on the back of improved volumes.
"Weather conditions were favorable for tea during the first quarter of FY15, but not so much in 2QFY15 and 3QFY15," Govindasamy said.
Although tea crops went up in the nine months, the new sale average fell 3.6 percent to 403 rupees per kilo from same period the previous year.