Watawala Plantations posts Rs 726 mn PAT for 2012/13

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

Boosted by strong Palm Oil performances, 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 yields in palm oil has once again contributed significantly to the 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 output 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.

Palm oil segment

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. The production of Palm Oil improved as the company adopted several modern agricultural practices, which is now producing results. Further several new fields came in for harvesting during the year under review.

Tea segment

Tea experienced a renaissance year, posting a PAT of Rs 66 million on a revenue of Rs 3.6 billion. A substantial turnaround given the segment posted a loss of Rs 407 million for last year. Improved agronomic practices implemented by the company, now appear to be showing good results.

Rubber segment

The 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.