Sri Lankaâ€™s Watawala Plantations December quarter net profit down 03-pct
ECONOMYNEXT – Sri Lanka’s Watawala Plantations, which now focuses on palm oil and dairy, having spun off its tea business, said net profit fell three percent to 196 million rupees in the December 2018 quarter from a year ago.
Earnings per share were 97 cents for the quarter with sales up 27 percent to 782 million rupees, according to interim accounts filed with the stock exchange. The share last traded at 20.60 rupees.
The accounts showed net profit from palm oil rose 22 percent to 249 million rupees in the December 2018 quarter while sales rose 34 percent to 293 million rupees.
Losses from the diary business rose slightly to 47 million rupees while sales more than doubled to 146 million rupees.
Quarterly net finance costs of Watawala Plantations more than doubled to almost 20 million rupees
EPS was 3.35 rupees in the nine months to December 2018 with net profit down 29 percent to 673 million rupees while sales fell 47 percent to 2.3 billion rupees
Watawala Plantations Managing Director Vish Govindasamy said in a note accompanying the accounts that production volumes increases along with selling prices supported profitability when compared to last year.
“Despite the volatility in the global palm oil prices, Watawala managed to maintain the selling prices as a result of signing of the forward contracts with buyers,” he said.
The quarterly performance of Watawala Dairy Limited showed continuous improvements, as the milk volume, prices and revenue increased significantly, Govindasamy said.
“The reported losses were lowered in comparison to the budget and the start-up losses which are well within the budgetary parameters, are regularly monitored and controlled by the company.”
The increased milk production from the cattle adding to the second lactation in the herd and the first lactation of 246 cattle imported from Australia in May 2018 mainly accounted for the volume increase, Govindasamy said.
In his outlook, Govindasamy said volatility in the global oil palm market will remain and the strengthening of the US dollar against the Lankan rupee will have mixed consequences for the industry.
“The dairy segment will further consolidate its operations with more focus on rationalising feed costs with the milk yields,” he said.