Bogawantalawa Tea Estates PLC records robust financial growth

Bogawantalawa Tea Estates PLC (BTE PLC) in its annual report for 2009/10 financial year has stated that the group has recorded a 159% increase in profits before tax and a 150% increase in profit after tax vis-a-vis 2008/09 financial year. Accordingly in 2009/10 year the PBT has recorded Rs. 134 Million profit before tax and the earnings per share works out to Rs. 2.26 per share.

Despite the Sri Lankan national tea production reducing by 9% to 290 Mn Kgs from the previous year, the annual tea production of the Company recorded an increase from the previous year figure of 7.95 Mn kgs to 8.16 Mn kgs. The Company has also realized an overall net sale average of Rs. 362.22 per kg during the year in consideration against Rs. 273.68 of last year, recording a 32% increase.

However, the cost of production for 2009/10 year was Rs. 331.21 per kg against Rs.271.31 last year. This increase was mainly due to higher prices paid for green leaf, increased wages and escalated fuel & fertilizer prices. 

Chairman, Bogawantalawa Tea Estates PLC, Mr. D J Ambani said “Overall, BTE managed to record a 150% growth in after tax profits and ploughed back a sum of Rs.203 Million on capital development programme during the financial year.” Ambani further stated that the key issue to be addressed by the regional plantation companies is the capital formation methodology to further invest in areas such as tea planting, soil building & agro-forestry and the marketing efforts in a sustainable manner, if Sri Lanka to compete aggressively in the global tea market. He further stated that an active intervention from government in developing the bond market would definitely ease the financial burdens of the tea industry.

The company continued to enhance the facilities at the tea processing centers to meet high international standards. In addition, the implementation of efficient fuel utilization systems, on -going projects aimed at improving quality of work life of employees and efficient management systems have also contributed towards the growth of BTE during the financial year in consideration.   

The company has made a considerable progress due to consistent marketing efforts which increased the market share especially in highly competitive markets such as US, Holland & Lithuania.

With the still looming global financial crisis and escalating fuel/fertilizer prices and possible wage increases, BTE PLC continuous to focus on diversification strategies such as eco-friendly leisure projects, mini hydro power projects, dairy farming, and forestry projects to maximize revenues from non-core business initiatives.  “This is where an innovative method of raising funds by way of a long term bond issue will come into play to address the much needed capital formation issue” Chairman said.