While the North and Eastern markets would create new opportunities to existing and new brands for Watawala Plantations PLC (WATA), the outlook for commodity prices also appears to be more favourable amid signs that the global economic recession is now past its worst, the company said.
In a statement to shareholders on its 6-month performance to September 30, 2009, company chairman G. Sathasivam said Watawala is expected to enjoy strong prices during the remainder of the year. “We also continue to explore all avenues by which to leverage our 12,000 hectare land,” he said.
WATA reported a turnover growth of 15% to Rs 2.4 billion during the period under review over the comparable period last year. Despite providing Rs 236 million to reflect the full impact of the wage increase (inclusive of gratuity), the company still reported an after-tax profit of Rs.51 million, the chairman’s statement said.
He said the company’s turnover from tea has increased by 25% from Rs.1.1 billion to Rs. 1.4 billion amids higher NSAs and output. Palm Oil sales also increased by 182%, from Rs.122 million to Rs.345 million in the first half of the year due to premium prices enjoyed in the local market. However, a decline of 52% was witnessed in turnover from rubber from Rs 93 million to Rs 44 million due to the erratic weather conditions that prevailed in the region. Export income also declined by 58% during the period under review, from Rs. 348 million to Rs.144 million.
Mr Sathasivam said the company’s retail marketing division which encompasses two of the country’s best selling tea brands, Zesta and Watawala Kahata, continued to perform well. The division posted a net profit of Rs.58 million and a turnover of Rs.514 million: an increase of 16% over the previous year.