Watawala profits boosted by improved tea and rubber prices

Watawala plantations, a unit of India's Tata group releasing its December quarter interim results said that it has recorded 189 million net profit, a 4 percent increase from a year ago.

The plantation company's nine months net profit has risen 84 percent to Rs.418 million, amidst improved tea, rubber and palm oil prices in the market.

Earnings per share for the company were 80 cents compared with 7.71 rupees the previous year, before a one into ten share split in September 2010.

Commenting on the tea sector performance of the company, Chairman Vish Govindasamay said, "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.'

He also said that 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" he remarked.

The rubber sector has contributed Rs. 80 million profit when compared to a loss of Rs. 7.5 Mn in the same period in the previous year. The average prices during the nine months improved by 80%.

"The company will be in a position to capitalize on this situation and report a better performance in the next quarter, subject to good weather conditions" Govindasamy said.

The company's Oil Palm segment has delivered 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" he said.

The former FMCG division of the company has been converted to Watawala Marketing Ltd. in April 2010. The marketing of the company's brands like Zesta Tea, Watawala Kahata, Ran Tea, Zest Mineral Water and Oliate Vegetable Oil are done by the company..

Watawala Marketing has had a remarkable nine months ended December 2010, reporting a nett Profit of Rs. 157 million which is a 43% growth over the nett profit of the previous period. Exports of the company to Australia are now handled by Watawala Marketing Ltd.

Watawala 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.

(Source: http://print.dailymirror.lk/business/127-local/34509.html)