12/08/2008 (LBO) - High prices of palm oil helped Sri Lanka's Namunukula Plantations increase June quarter net profit by almost half to 71 million rupees from a year ago as profits from tea and rubber fell.
Turnover in the firm, a unit of the Richard Pieris & Company group, rose 29 percent to 480 million rupees in the same period, according to interim results.
Namunukula's gross profit from palm oil went up to 52 million rupees from 29 million rupees over the period under review, according to a segmental analysis that accompanied the quarterly results.
Turnover from palm oil rose to 84 million rupees from 49 million rupees.
The company's profit from rubber fell to 31.6 million rupees from 32.5 million rupees while revenue also fell to 85.8 million rupees from 87.7 million rupees.
Namunukula's gross profit from tea fell to 26.6 million rupees from 27.6 million rupees while revenue rose to 302 million rupees from 229 million rupees.
Palm oil prices have started to fall in recent weeks after hitting record highs on the back of strong global demand and tight supply.
It is used in common household food stuffs like margarine and in Asian countries has traditionally been used as a frying oil.
Demand for the product has also increased owing to its potential as a biofuel, causing tight supply in the foods market.
Namunukula Plantations has over 900 hectares under oil palm and plans to increase cultivation to 1,500 hectares in the next five years.
The firm's total annual production is around 10.5 million kilos of fresh fruit bunches which it sells to the AEN Palm Oil factory, a joint venture between Namunukula, Agalawatte and Elpitiya plantations companies.
The crude palm oil made by the mill is exported to India where demand has soared owing to strong economic growth and increasing consumer incomes.