Tea Smallholder Factories records losses

Tea Smallholder Factories PLC, a unit of John Keells group, recorded losses for the quarter ended June 30, 2015 following a considerable decline in its top line.

The company, which produces tea from leaves purchased from independent tea growers or smallholders, saw its revenue falling 18 percent year-on-year (yoy) to Rs.516 million.

Although the cost of sales fell 15 percent yoy to 505.7 million, the firm’s gross profit fell 73 percent yoy to Rs.10.5 million.

The earnings per share deteriorated to 01 cent from 65 cents. 

The company runs factories in several locations in the country using tea bought from smallholder growers.

Sri Lanka’s tea industry is faced with a plethora of problems including slowing demand, lower prices and political uncertainties in key export markets.

However, with the lifting of economic sanctions imposed on Iran, it is expected to give a new lease of life to the industry.

Apart from John Keells and Central Finance PLC, Akbar Brothers, the largest tea exporter in the country also holds a 24 percent stake in the company.