Malwatte Valley brews over Rs. 1.3 m net profit daily!

Thursday, 3 March 2011 00:40 - - {{hitsCtrl.values.hits}}

Malwatte Valley Plantations PLC has seen its sustained net profit soar over the past few years.

Its strategy to rationalise its tea manufacture to its better garden marks and the buoyant rubber prices have brought about this year’s increase in profits. However, the company is not ready to relax and new strategies are in the pipeline. Sarnia estate was a leading performer.

One of the leading tea brokers John Keels PLC states: “This performance could possibly be a record feat achieved by any estate/factory in the history of tea plantation in the country.”

The company has recorded a net profit before tax of nearly Rs. 470 million for the financial year ended 31 December 2010. This is an increase of 476% on the previous year and computes at approximately Rs. 1.3. million per day.

“Malwatte Valley is now amongst the key players in the industry. With an EPS of 18.98 it is amongst the highest earners in the industry,” commented Chairman and Managing Director W.L. Bogtstra.

The company is considering diversification into other sectors in order to exploit Sri Lanka’s rapidly expanding economy. Construction, IT, health and tourism are some of the fast growing industries at the moment with short gestation periods, said Bogtstra.

Malwatte Valley will diversify into tourism this year and is currently looking at investments, both at home and abroad. For this purpose, it is tying up with a well known hotel chain, which will manage its investments in the tourism sector.

Management of plantations will continue and with the fine mix of tea and rubber estates the company has, 2011 should also be a successful year in the event prices being favourable with wages being related to performance.

In 2010 the company’s gross profit margin on rubber was 61.49%, which is the highest known margin to-date, reflecting the overall efficiency of this sector.