Bad weather drives Maskeliya to the red, but investment sustained

Plants rubber in Bandarawela, citrus and cinnamon on tea estates

Dr. Sena Yaddehige, Chairman

Maskeliya Plantations PLC, a member of the Richard Pieris group, has posted a loss of Rs.92.2 million in the year ended March 31, 2014 against a profit of Rs.151.7 million a year earlier but had boosted capital expenditure to Rs.230.3 million from Rs.211.4 million the previous year.

The company’s Chairman, Dr. Sena Yaddehige attributed these results to unfavourable weather including excessive rainfall and continued gloomy conditions from May to July with some of their estates recording only 40% of the estimated crop during this period.

Also the wage hike and short supply of key inorganic fertilizer during the financial year had hurt the company with the situation worsening with dry weather in the last quarter of the year under review.

Production was down 8% during the year to 8.25 million kg. of tea and despite better prices, turnover was down 4% to Rs.3.4 billion.

The crop was the lowest ever due to adverse weather conditions in the Maskeliya, Upcot and Talawakelle regions. However, they have maintained good quality in the tea produced.

Capital expenditure covered replanting and maintenance of tea (Rs.164 million), Rs.39 million for rubber planting, Rs.14 million for fruit cultivation and Rs.2 million for cultivating cinnamon.

Maskeliya had planted rubber in poor tea land and cultivable bare land in the Bandarawela region and expected that dendro power (gliricidia) and fruit cultivation projects undertaken will give long-term benefits upon completion of the crop diversification process.

"Maskeliya Plantations PLC commenced harvesting of timber in accordance with the Forestry Management Plan during the year under review. Action has already been initiated to

plant timber species in the areas where timber has been harvested in order to establish the same canopy in the plantation and to generate income in the future," Yaddehige said.

"The company plans to introduce more effective methods to improve productivity and to eliminate losses due to the shortage of workers during high cropping periods."

Maskeliya controls 10,561.33 ha of land in Upcot, Maskeliya, Talawakelle and Bandarawela.

The company has a stated capital of Rs.673.7 million, a general reserve of Rs.540 million, timber reserves of Rs.517.4 million and retained losses of Rs.321.8 million in its books. Total assets stood at Rs.4.2 billion and total liabilities at Rs.2.79 billion.

RPC Management Services (Pvt) Ltd with 83.40% is the major shareholder followed by David Pieris Motor Company (2.15%) and Mr. C.P. de Silva (1.45%).

A management fee of Rs.150.4 million, down from Rs.184.1 million a year earlier, had been paid to the parent company, the report revealed.

The directors of the company are: Dr. Sena Yaddehige (Chairman), Mr. J.H.P. Ratnayeke (Deputy Chairman), Mr. S.S. Poholiydde (CEO), Dr. H.S.D. Soysa, Mr. E.M.M. Boyagoda and Dr. L.S.K. Hettiarachchi (w.e.f. 02.05.2014)

www.island.lk