Talawakelle: Future plans robust despite challenging 2007
After a challenging year, Talawakelle Tea Estate PLC recorded a net profit after tax of Rs.100.9 million for the year ended 31 December 2007. According to the Annual Report, turnover and net profit after tax increased by Rs.188.9 million and Rs.22.3 million respectively over the previous year. Chairman N.G. Wickremeratne said the major challenges faced during the year were overgrown tea fields due to the previous year's strike, rising fertilizer and energy costs, high interest rates and a substantial wage increase mandated by the government in November 2007. In the report, he added that a focus on quality, good agricultural practices and a strong market for teas mitigated the impact.
Furthermore, Wickremeratne said estate level profitability recorded a substantial increase over the previous year with low growns recording an excellent performance. Tea production, estate and bought leaf, declined from the previous year by 1.37 million/kg to 6.25 million/kg, compared to the previous year's 7.62 million/kg. The early part of the year was affected by the industrial unrest at the end of 2006 and thereafter, the company was affected by unfavourable weather and a reduction in bought leaf intakes.
Talawakelle made investments in field and non-field development and its employees. The investment made was Rs.187.3 million in total, Rs.122.8 million in field development and Rs.64.5 million in non-field development. The investments were part financed through ADB concessionary funding.
During the year, no dividend was declared due to poor trading conditions. However, Wickremeratne stated that an interim dividend was declared in February 2008, following an improved performance in the fourth quarter.
During the coming year, the company plans to commence construction of the new Logie/Bearwell tea factory in line with its strategy to produce a quality tea and consolidate factory operations. A green tea line will also be established for greater product diversity.