KVPL records Rs 132 million profits in first half

Kelani Valley Pla- ntations PLC (KVPL), the Hayleys Group’s plantation company, has reported a turnover of Rs 1.2 billion for the six months ending June 30, 2007, achieving a marginal improvement over the corresponding half of 2006 despite a significant loss of tea crop particularly in the first quarter of the year.

A nominal increase in rubber production and a 14 per cent improvement in average net sales prices resulted in revenue from rubber growing 18 per cent to Rs 481 million. This supported by a 32 per cent increase in the average sales price for tea, enabled the company to post what its Managing Director Kavi Seneviratne describes as a satisfactory performance in the circumstances.

The first quarter of KVPL witnessed a loss of about a third of the company’s tea production as a result of a 30-day go slow and strike by plantation workers in late 2006. Seneviratne disclosed that, the adverse impact of this crop loss was compounded by a wage increase and a sharp rise in fertilizer cost in the period under review.

As a result of these factors, KVPL’s profit before tax of Rs 143 million was down by 26 per cent over the first half of 2006, while post-tax profit declined by 29 per cent to Rs 132 million.

Notwithstanding these setbacks, the company remains confident that the prevailing prices of tea and rubber will help to partly offset the factors that impacted on first half performance by the year’s end, Seneviratne said.