Watawala Plantations profit after tax soars 26% to Rs. 204.4m

Watawala Plantations, one of the country's top 10 tea exporters, has reported strong profit growth in 2005-06, following good performances in all segments of operations.

In results released to the Colombo Stock Exchange this week, the makers of 'Zesta' reported that the turnover had grown 5 per cent to Rs. 2,855 million, and pre-tax profit a healthy 31.2 per cent to Rs. 218.9 million. Profit after tax at Rs. 204.4 million reflected a growth of 26.3 per cent.

Tea continued to be the main contributor to the company's revenue, accounting for nearly 63 per cent of total revenue. Despite a marginal drop in production volumes, a strong focus on quality improvements and marketing has been cited as the key factors in the success of this segment. The company's Retail Marketing Division responsible for the marketing of its flagship brands 'Zesta' and Watawala Kahata achieved a 23 per cent increase in revenue in the year under review.

Record rubber prices and a noteworthy 14 per cent increase in Watawala's rubber crop despite bad weather conditions in the rubber growing regions contributed to a 29 per cent increase in revenue from the rubber sector. The company's Net Sales Average (NSA) rose 12 per cent over the previous year.

Commenting on these results, Watawala Plantations Chairman G. Sathasivam also paid tribute to the company's partnership with Tata Tea and the Tetley Group, the second largest global tea marketer. "The very strong supply chain that has been established by this arrangement enabled our products and services to reach Tetley customers throughout the world, while continuing to serve as the local exporting and packaging arm of the Tetley Group," he said.

He said the company's commitment to drive quality enhancement initiatives through the adoption of ISO, HACCP, 5S and Tea Association of Sri Lanka (TASL) certifications at estate and factory level had also paid dividends, with estates such as Vellaioya, Abbotsleigh and Kenilworth achieving all-time national record prices for selected grades on tea in the year under review.