COLOMBO (EconomyNext) – Sri Lanka’s Watawala Plantations said it ended the March quarter with a loss of 1.19 million rupees, with palm oil profits helping offset losses in rubber and tea as commodity prices fell.
The firm reported a loss of 0.01 cents per share in interim accounts filed with the Colombo Stock Exchange. For the year to March 2015, it reported earnings of 1.72 rupees on total profits of 407 million rupees down from 434 million rupees.
In the March quarter revenues dropped 9 percent to 1.58 billion rupees and cost of sales was flat at 1.51 billion rupees, and gross profits fell 72 percent to 56 million rupees.
Some plantations firms have reported losses at gross level.
In the year to March 2015 revenues grew 10 percent to 6.8 billion rupees.
Managing Director Vish Govindasamy told shareholders there was a 369 million rupees loss before tax in the tea division as net sale averages at Colombo auctions fell amid turmoil in the Middle East, Russia and Ukraine which buy about 70 percent of Sri Lanka tea.
Russia had been hit by falling oil prices as the US dollar strengthened. Countries such as Russia, Venezuela and Iran gets hit more than other countries because their Central Banks print money when state oil revenues fall, leading to currency collapses, analysts have said.
Watawala’s rubber sector lost 90 million rupees as commodity prices fell with a strengthening dollar.
The firms said Palm Oil gave profit before tax on 793 million rupees.
"The improvement in the profitability is on account of growth in production volume by 9 per cent to record at 8.8 Mn Kg of Crude Palm Oil (CPO) driven by the better yields as a result of good agro practices and the new fields coming into bearing during the year," Govindasamy said.
Edible oils are imported tax protected in Sri Lanka.