Watawala Plantations PLC has had an excellent nine months ended December 2010 with group net profit of Rs. 418 million which is an 85% increase over the same period previous year. The company recorded a profit after tax of Rs. 332 million.
The performance of tea was encouraging which bettered the performance of the previous period by improving on the bottom line by 44%. Increased production coupled with better agricultural practices and better prices in comparison with the market elevation averages were the main contributory factors.
Waltrim Estate in the Lindula region, which now has a ‘state of the art’ factory, has re-established its mark in the region by fetching high prices. This recovery after the old Waltrim factory which was fully gutted by fire in April 2008 is remarkable.
Exceptionally high rubber prices have significantly increased the profitability of this segment, with rubber contributing Rs. 80 million profit, when compared to a loss of Rs. 7.5 million in the same period of the previous year.
The average prices during the nine months improved by 80%. The company will be in a position to capitalise on this situation and report a better performance in the next quarter subject to good weather conditions.
The oil palm segment has once again delivered excellent results recording a Rs. 168 million profit. This is marginally lower when compared to the previous period as production declined due to unfavourable weather conditions but with improving prices due to global supply shortages, profitability was maintained. However, it is envisaged that this trend would ease towards the end of the financial year.
The Company continues to benefit from its partnership with Tata Global Beverages Ltd. (formerly Tata Tea Ltd.) with increasing support for exports of bulk and value added tea to them and their clients. Exports of the company to Australia are now handled by Watawala Marketing Ltd. which is a fully owned subsidiary. Therefore, these results are reflected in the subsidiary’s accounts.
The former FMCG division of the Company was converted to Watawala Marketing Ltd in April 2010. They market Zesta Tea, Watawala Kahata, Ran Tea, Zest Mineral Water and Oliate Vegetable Oil. The Company has had a remarkable nine months ended December 2010, reporting a net profit of Rs. 157 million which is a 43% growth over the net profit of the previous period.