Malwatte Valley eying record year

Monday, 22 November 2010 00:01 - - {{hitsCtrl.values.hits}}

Prevailing boom in rubber prices has enabled Malwatte Valley Plantations Plc to increase its profits to Rs. 368 million in the first nine months of 2010 beating the Rs. 348 million posted in the corresponding period of last year.

According to the Company’s Managing Director W.L. Bogtstra if trading conditions remained favourable a record year was likely.

Last year though end third quarter net profit amounted to Rs. 348 million, Malwatte Valley finished the year with a profit of only Rs. 81 million. This was owing to the impact of what was described then as the ‘double-whammy” in the form of unprecedented wage hike of 41% and consequentially an equally damaging retroactive gratuity provision. These factors skyrocketed costs and eroded cash flows in the final quarter of 2009. . Furthermore, large increases in fertilizer and chemical

prices aggravated the erosion of the bottom line of the Company.

In 2008, the Company posted a net profit of Rs. 338 million and by end of third quarter of this year this figure has been surpassed comfortably. Malwatte Valley’s highest profit figure was in 2007 amounting to Rs. 381 million. Control (62.563%) of Malwatte Valley is held by Wayamba Plantation Ltd.

In the first nine months of 2010, turnover of the company amounted to Rs. 2.5 billion, up from Rs. 1.98 billion a year earlier. Gross profit however amounted to Rs. 453.3 million, down from Rs. 469,3 million a year earlier but higher in comparison to Rs. 232.4 million in 2009 full year.

Its bottom line had been boosted by Rs. 91.5 million in other operating income, up from Rs. 71.4 million a year earlier and lower finance cost Rs. 68 million as against Rs. 101.3 million in the first nine months of last year.

Earning per share of the Company was Rs. 14.88 whilst net asset value amounted to Rs. 69 as against Rs. 15.50 and Rs. 73.09 a year earlier.

Bogtstra said Malwatte Valley is exploring avenues for acquisitions and diversifications in other high performing sectors resulting from the economic boom now prevailing in the country.