John Keells tea unit returns to profitability in December

24 January 2017 09:15 am - 0     - {{hitsCtrl.values.hits}}


A unit of the John Keells group, Tea Smallholder Factories PLC (TSML), posted a net profit of Rs.25.89 million for the quarter ended December 31, 2016 (3Q16), against a net loss of Rs.522,000 from an year ago, the interim financial accounts showed.
The earnings per share in 3Q16 increased to Rs.0.86 from a negative Rs.0.02 year-on-year (YoY). The performance is the best recorded since December 2013, when a net profit of Rs.37.87 million had been achieved. TSML makes black tea from leaves bought from tea smallholders. 
The country experienced a slowdown in production during 3Q16, which resulted in the Colombo tea auction prices reaching record levels, following two years during which the auction prices were below costs of production. TSML’s revenue increased 31 percent YoY to Rs.586.96 million, while the 
cost of sales increased to Rs.535.86 million, a 23 percent increase YoY.

The company’s asset base in 3Q16 appreciated to Rs.1.31 billion from Rs.1.24 billion at the start of the financial year, resulting in the net assets per share increasing marginally to Rs.31.19 from Rs.30.36 during the same period.
For the nine months ended December 31, 2016, TSML posted a net profit of Rs.39.96 million, up from a net loss of Rs.13.62 million YoY, with revenue increasing 15 percent YoY to Rs.1.65 billion and cost 
of sales increasing 9 percent YoY to 
Rs.1.55 billion.
Sri Lanka’s largest conglomerate, John Keells Holdings PLC, owns 37.62 percent of the shares in TSML, while Akbar Brothers Limited owns 24.39 percent, Central Finance Company PLC owns 22.85 percent and CF Growth Fund Limited owns 6.45 percent.


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