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Sunday May 19th, 2024

Sri Lanka’s Watawala Plantations profits down in Dec on flat revenue

ECONOMYNEXT– Watawala Plantations Plc, Sri Lanka’s largest palm oil producer, said the firm’s net profits fell 17 percent to 174 million rupees in the December 2019 quarter from a year earlier on flat revenue.

The group reported earnings of 86 cents per share for the quarter in its interim financial report.

For the nine months ending December, Watawala earned 3.82 rupees a share on profits of 776.6 million rupees, up 15 percent. The stock closed Friday at 25.40 rupees.

Revenues fell 1 percent to 775 million rupees in the December 2019 quarter on miscellaneous businesses, and cost of sales grew 2 percent to 493 million rupees, dragging down the gross profits 5 percent to 282 million rupees.

Finance costs grew 19 percent to 39.4 million rupees.

Watawala reduced its long-term borrowings to 649.1 million rupees at end-December from 1.1 billion rupees at the start of the financial year nine months earlier, while short-term borrowings grew to 181.1 million rupees from 144.5 million rupees.

Revenue for the quarter had fallen on the ‘other’ miscellaneous segment, which fell to zero from 13.3 million rupees a year earlier. Watawala has some residual tea businesses, as well as spice and timber operations.

The group spun off its main tea business into Hatton Plantations Plc, which was sold of to Singapore-based G&G group in 2019.

The main palm oil segment profits grew to 628.2 million rupees in December from 622.5 million rupees a year earlier, while net profits fell to 202.9 million rupees from 249.2 million rupees on higher cost of sales and finance expenses.

Watawala Plantations Managing Director Vish Govindasamy in an earnings release said the palm oil industry will face trouble in the future, as new tree planting has been restricted.

“Company has been challenged by the regulations imposed on palm oil and there by unable to continue the planting program,” he said.

“The industry had requested at least planting of the seedling materials laying at the nursery. The industry is engaging with the ministry authorities to get a clear future direction on the regulation relating to the industry.”

Sri Lanka has had oil palm for 51 years with no problems, but false accusations against the crop started only five years ago, the Planter’s Association representing regional plantations companies said in an earlier report.

The accusations include that oil palm depletes groundwater and causes droughts, as well as claims that they cause mange in dogs and pushing up the population of serpents.

The global opposition to palm oil came from Malaysia’s practices involving cutting down tropical rainforests to plant oil palm.

However, in Sri Lanka only unproductive rubber estates are re-planted with palm oil.

The government gives incentives to palm oil in the form of import duties on vegetable and coconut oil. High import duties make oil palm more profitable than rubber or any other crop by keeping domestic prices higher than world prices.

Sri Lanka also had high export taxes (cess) on raw rubber, which also reduces income from the crop to below the global price discouraging the
cultivation of any other crop.

Oil palm is also less labor intensive.

Meanwhile, the group’s dairy farm reported 147.2 million rupees in revenue, up 1 percent from 145.8 million rupees a year earlier, while the loss after tax improved to 42.1 million rupees form 47.2 million rupees a year earlier.

This is despite Govindasamy saying that milk yields and prices have both grown ‘significantly’.

“The revenue showed a continuous improvement during the period, as the milk volumes and prices have increased significantly,” he said.

“The improved milk yield was driven by majority of the herd moving into the second lactation cycle, while the stringent cost optimization measurers resulted in improved performance during the period.”

He said the dairy segment will perform better in the quarters ahead.

“The dairy segment will further consolidate its operations with better prices, due to the increase in demand for fresh milk in Sri Lanka,” Govindasamy said.

“Furthermore, the segment will focus on rationalizing feed costs, and increasing the milk yields.”

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Sri Lanka seeks to draw youth into agri-entrepreneurship with 1.6bn funding

ECONOMYNEXT – Sri Lanka’s Ministry of Agriculture and Plantation Industries has earmarked 1.6 billion rupees for the establishment of 160 model farms across the island, that are to be owned and operated by youth agri-entrepreneurs.

“The Ministry of Agriculture and Plantation Industries has taken steps to allocate 1,600 million rupees to establish 160 villages in 25 districts with 6 youth agri entrepreneurship villages in each district,” Minister Mahinda Amaraweera was quoted in a statement.

“Arrangements have been made to provide an amount of one million rupees to each village under the first phase.”

The Minister said the aim of the program is to attract youth to agriculture and to introduce them to new agricultural technology, so they could target local markets and exports.

Under the initiative vegetables, fruits, plantation crops, and fish are to be harvested, and livestock products are to be produced in the villages. (Colombo/May18/2024)

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Sri Lanka Navy nabs fishermen engaged in illegal fishing

ECONOMYNEXT – Sri Lanka’s Navy apprehended eight persons engaged in illegal fishing in the seas off Ambalanpokkanei, Mullaitivu, Poduwakattu, and Trincomalee, this week.

“The operations also led to the seizure of 3 dinghies and unauthorized fishing gear employed for these illegal acts,” it said in a statement.

“The Sri Lanka Navy remains vigilant and conducts operations to combat illegal fishing in its sea and coastal areas, with a view to supporting legal fishing activities.”

The fishermen were engaging in light-coarse fishing and using unauthorized fishing nets.

They were intercepted by the SLNS Gotabaya and SLNS Walagamba of the Eastern Naval Command.

The individuals were identified as residents of Mullaitivu, Kuchchaveli and Poduwakattu, aged between 21 to 53 years.

The fishermen, dinghies and unauthorized fishing gear were handed over to the Assistant Directorate of Fisheries – Mullaitivu, and the Fisheries Inspector of Trincomalee for legal action, the Navy said. (Colombo/May18/2024)

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Fifteen years after the end of the war, victims still await justice at Mullivaikkal: Amnesty

ECONOMYNEXT – Speaking at a commemoration marking the 15th anniversary of the end of Sri Lanka’s internal armed conflict on 18 May 2009, which culminated in the brutal Mullivaikkal offensive where countless civilian lives were lost, Secretary General at Amnesty International Agnès Callamard said:

“Today’s anniversary is a grim reminder of the collective failure of the Sri Lankan authorities and the international community to deliver justice to the many victims of Sri Lanka’s three-decade-long internal armed conflict.

It is sobering to stand in the same place where, 15 years ago, countless civilian lives were lost during the last days of the war.

Ahead of this event, we have witnessed clampdown on the memory initiatives, including arrests, arbitrary detentions and deliberately skewed interpretations of the Tamil community’s attempts to remember their people lost to the war. Authorities must respect the space for victims to grieve, memorialise their loved ones and respect their right to freedom of expression and peaceful assembly.

UN investigations have found credible evidence of crimes under international law and other violations of international human rights and humanitarian law committed by those on both sides of the conflict, yet there has been little in the way of an independent or impartial national inquiry into such serious crimes.

Meanwhile, the families of those who were forcibly disappeared during the conflict have been left to search desperately for their loved ones. It is truly heartbreaking to hear from victims how long they have been demanding justice in vain.

The Sri Lankan government is best placed to provide answers to the victims, however numerous domestic mechanisms to establish accountability in the last 15 years have been mere window dressing.

The report by the UN Office of the High Commissioner for Human Rights released earlier this week too reiterates the gaping deficits in Sri Lanka’s accountability initiatives that has contributed to impunity remaining deeply entrenched.

Tens of thousands of victims and their families continue to suffer in anguish as they await truth, justice, and reparations. We stand in solidarity with them here in Mullivaikkal today.”

Background:

During the internal armed conflict from 1983 to 2009, Sri Lankan government forces and their armed political affiliates committed extrajudicial killings, enforced disappearances and acts of torture against Tamils suspected of links to the Liberation Tigers of Tamil Eelam (LTTE).

The LTTE also launched indiscriminate suicide attacks on civilian targets like buses and railway stations, assassinated politicians and critics, and forcibly recruited children as fighters.

Violations of international human rights and humanitarian law peaked in the final months of the conflict, most notably in May 2009 when some 300,000 displaced civilians were trapped between the warring parties.

It was at Mullivaikkal, a small village in Mullaitivu district in the Northern Province of Sri Lanka, where the final offensive between the Sri Lankan forces and the LTTE took place, killing at least 40,000 civilians according to UN estimates.

Each year, on 18 May, a memorial event at Mullivaikkal brings together thousands of war-affected Tamils to commemorate those lost to the war and demand justice and accountability.

The Office of the High Commissioner for Human Rights (OHCHR) this week released a report on accountability for enforced disappearances in Sri Lanka.
(Colombo/May18/2024)

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