Severe drought, drop in rubber prices affect KVPL's 1Q results

The combined impact of a massive shortfall in its tea crop and a sharp decline in the prices of rubber has depressed turnover and profit at Kelani Valley Plantations PLC (KVPL) in the first quarter of 2009, the Dipped Products Group plantation company has reported.

According to results released to the Colombo Stock Exchange this week, turnover for the three months ending March 31, 2009 declined by 43 percent to Rs. 489.8 million, resulting in KVPL sustaining a net loss of Rs. 46.6 million for the period.

The principal cause for this result was a 42 percent drop in tea production as a consequence of the severe drought that prevailed in the period reviewed, which converted to Rs 200 million in revenue terms.

Rubber production declined 11 percent, and prices for this commodity dropped sharply over the corresponding quarter of last year, resulting in revenue from rubber declining by Rs. 160 million or 49 percent, the company said.