Watawala Plantations posts Rs. 726 m PAT

Agribusiness company, Watawala Plantations PLC (WATA), a member of Sunshine Enterprise, has posted a 62% growth in profits (YoY) to report Rs 726 million PAT for the year ending March 31, 2013 (FY 2012/13).

Boosted by strong palm oil performances, the company continues to benefit from its diversified crop portfolio in a volatile commodity environment.

The diversified portfolio for Watawala has recorded strong revenue growth to post Rs 5.3 billion, a 28% increase from the previous year. Good agricultural practices by the company saw record yields in their diversified crop portfolio.

The increase in production and yield in palm oil has again contributed significantly to bottom line growth and we are confident the momentum can be maintained for the next year.

Palm oil output (crude palm oil) grew 13% to 7.4 million kgs while tea production increased 7.5% to 6.2 million kgs. Rubber production saw an 18% decrease, mainly due to adverse weather conditions and reduced hectarage to 0.53 million kgs.

The largest palm oil producer in the country, posted a PAT of Rs 545 million for the year, a growth of 28.5% YoY while Revenue was Rs 1.3 billion. Palm oil is the largest profit earner for the company. The production of palm oil improved as the company adopted several modern agricultural practices, which is now producing results. Several new fields came in for harvesting during the year under review.

Tea experienced a renaissance year, posting a PAT of Rs 66 million on a revenue of Rs 3.6 billion. A substantial turnaround from the loss of Rs 407 million last year.

Improved agronomical practices implemented by the company, now appear to be showing good results. Rubber production dropped by almost 18% and the average NSA for the year dipped by Rs. 76, thus creating a marginal profit during the year under review.

Several hectares of rubber were abandoned due to old age, which is due for uprooting and replanting.

Despite the uncertainties in the global economy, the Group remains positive on its long-term prospects due to continued increase in the production of palm oil.