Kelani Valley Group records Rs 463 m net profit

Ramani Kangaraarachchi

The Kelani Valley Group posted a post tax profit of Rs 463 million in 2011 despite a sharp decline in the tea market at the end of the first quarter, down turn in rubber prices in the latter half of the year and impact of the wage increase in April, KVPL Chairman Mohan Pandithage said.

He said this is the highest amount since its inception.

The profit before tax includes a contribution of Rs 37 million from Mabroc Teas which has been engaged in the export of value added products and the brand promotion overseas for more than two decades. The company recorded a turnover of Rs 6,110 m compared to Rs 3,880 m in the previous year.

Pandithage said 2011 has been a good year for KVPL and its positioning as a preferred supplier to major buyers was reinforced with all tea processing centres and 19 tea gardens.

The company has proposed a dividend of Rs 5 per share for the year. The company was also able to translate an additional Rs 340 million annually as a result of negotiating the plantation worker wage increase without any disruption to work.

Meanwhile, KVPL improved its tea production by 10.1% over 2010 with its high growns contributing 10.9% to the increased output.

Rubber prices rose steadily in all markets from the last quarter of 2010 up to the third quarter of 2011, with Latex Crepe peaking over US$ 6 in June and RSS fetching equal value in February at the Colombo auction.

The group revamped its operation during the year under review by investing in new tea blending cleaning and packing machinery automating and streamlining tea bag aging operations installing a new racking system and an office complex to accommodate all operations under one roof, he said.