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| Sunday, 31 July 2005 |
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Madulsima Plantations turns loss into Rs. 5.7m profit Madulsima Plantations Ltd (MPL) which has its tea plantations in the eastern Uva region, recorded a profit of Rs. 5.665 million for the year 2004, following a loss of Rs. 68.631 million during 2003. Revenue for 2004, was Rs. 942.055 million, up from Rs. 818.972 million during the previous year. Cost of sales for the year in review was Rs. 881.352 million, up from Rs. 818.149 million in 2003. During the year, a prolonged drought experienced in the Madulsima region from May to August affected production. Also, the continuous rain during the north east monsoon in the late months of the year hindered yield, chairman, V. P. Vittachi said. A token one day strike in May, where 9,672 workers of a total workforce of 10,152, incurred a loss of 23,125 kilos of made tea and a loss of Rs. 2.877 million, the report says. The company contracted an additional wage increase of Rs. 32.4 million during 2004 and the increase also enhances the retiring gratuity liability by Rs. 19.4 million, Vittachi told shareholders. The company spent Rs. 51.99 million on capital assets during the year including tea replanting, on fuel wood, rubber, other crops, land development, plant and machinery, furniture and fittings, vehicles, equipment, other buildings, water supply and sanitation. Five hectares of citrus were planted in Yapame division of Mahadowa Estate, while 18.06 hectares of coffee and 0.29 hectares of Mahogany were inter-planted in uneconomic tea extents, Vittachi said. The year 2005 is due to pose an enormous challenge as the cost of production is expected to be much higher than that in 2004. There are two main factors which contribute to this increase. First the increase in the wages particularly the effect of the variable Price Share Supplement as it is based on the national tea average. Secondly with effect from 2005 the Department of Inland Revenue, unlike in the preceding years will not reimburse the VAT paid by the plantation companies. The additional expenditure would cost as much as Rs. 60 million to the company. The increase in the cost of production will move the break-even yield of the company to 1,597kg/ha compared to the anticipated company yield of 1,499 kg/ha. The company regrets that for the third successive year no dividend is recommended to shareholders. (EL) |
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