09.08.2018 (EconomyNext) - ECONOMYNEXT – Sri Lanka’s Watawala Plantations net profit fell 57% to 164 million rupees in the June 2018 quarter from a year ago with lower crop amid volatile palm oil prices and continuing losses at its dairy unit.
Sales of the firm, now focusing on cultivation and processing of palm oil and dairy farming, fell 66% to 673 million rupees during the period, interim accounts filed with the stock exchange showed.
Earnings per share of Watawala almost halved to 74 cents in the June 2018 quarter. The stock was trading unchanged at 23.90 rupees Thursday.
The accounts showed no earnings from tea, the business having been separated in a restructuring and now under Hatton Plantations. Watawala’s tea business had made a net profit of almost 90 million in the June 2017 quarter.
Watawala Plantations Managing Director Vish Govindasamy said global oil palm prices remained volatile due to supply and demand side factors.
“The volatility in the global oil palm market is likely to prevail for the foreseeable period,” he said in a note accompanying the accounts.
The estate crop for the June 2018 quarter was down 14% from the previous year mainly due to seasonal factors resulting in lower revenue.
“This was partially offset by the crop purchased from other plantation companies resulting in a net crop loss of 9%,” Govindasamy said.
However, Govindasamy said net sale average for the period was higher than the same period last year and that cushioned the impact of the lower crops.
Startup losses at Watawala Dairy Limited remained large, rising to 45 million rupees from less than eight million rupees the previous year.
“However, they are being contained within the budgeted parameters,” Govindasamy said.
He said the dairy business should improve through better herd management and efficient utilization of resources.
“Milk yields are expected to increase when 246 cattle imported during the reporting period start milking in the ensuing period.”