Agalawatte records best ever performance in 2007

Agalawatte Plantations PLC (APL), the Mackwoods Group Plantation company has recorded a turnover of Rs. 1.88 billion and a net profit of Rs. 165.3 million in 2007, both of which are the highest in its history.

Commenting on the results, Chairman of Agalawatte Plantations, and Chairman of the Mackwoods Group, Dr. Chris Nonis, said this profit, which translates to a record EPS of 6.6 and an increase of 88% on last year, is commendable, considering the unexpected wage increase granted to the workers in November 2007, the escalation of input costs and the negative impact of the previous year's strike.

All three major crops, tea, rubber, and oil palm, contributed to the bottom line, which is now reaping the benefits of the company's long term strategy of diversification to ensure sustainability.

Given this improved bottom line, the Board of Directors has recommended a dividend of 20%, compared with the 12.5% paid last year.

The Board, continuing its policy of fiscal prudence and mindful of the needs of the capital development and diversification programme of the company, has proposed to transfer Rs 70.mn to Reserves.

APL's rubber yield in 2007 is the highest ever achieved, and denotes an increase of 26% over the previous year.

The company harvested a rubber crop of 4 million kgs., with a yield per hectare of 1,059 kgs, which also reflects its implementation of best agronomic and management practices.

The Rubber turnover at Rs 923 mn. is also the highest on record, and is an increase of 35% compared with the previous year.

Despite a 3% decline in the auction price of Latex Crepe, the company's rubber NSA increased by 10% over 2006, aided by stringent quality controls which ensured a premium product with a high prime grade percentage.

The aftermath of the strike of December 2006 and the drought in the first quarter of 2007, which contributed to the drop in National Tea Production in 2007, resulted in a 6% decrease in APL's tea crop against 2006.

Despite this setback however, the company succeeded in improving its tea NSA's by 44% during the year, thereby increasing the turnover of tea to Rs. 859 million, an increase of 35% compared to the previous year.

"The Sri Lankan economy is projected to grow at 7%, and if inflation is attenuated, the overall economic outlook for the plantation sector is positive.

The favourable global demand and supply dynamics of the three major crops - rubber, tea and palm oil, should continue in 2008," Dr Nonis said.