Market share of 15% of low growns
Ceylon Tea Brokers PLC, the only stand-alone tea broking company listed on the Colombo Stock Exchange, has seen both revenue and profit growth in the year ended March 31, 2014 with revenue up to Rs.259.19 million from the previous year’s Rs.203.82 million and an attributable profit of Rs.56.20 million, up from the previous year’s Rs.39.77 million posted.
The company’s Chairman, Mr. Chrisantha Perera, described these results as "encouraging" and said that tea production last year had reached an all-time high of 340 million kilos topping the 331.4 million kilos achieved in 2010 with a gain of 11.6 million kilos over the 2012 production.
"Low growns continue to lead the way with over 60% of the production and at 208.1 million kilos is the highest on record, surpassing the previous best of 202.1 million kilos achieved in 2012," Perera said
"High and mid grown production was also higher than 2012 at 75.8 million kilos and 56.1 million kilos respectively, although not all time records."
Tea sold at the Colombo tea auctions had performed strongly with the average prices for all categories both in rupee terms and dollar equivalents being all-time records.
"It is noteworthy to highlight that this is the first occasion tea export earnings expressed in US dollars, have surpassed US$ 1.5 billion," Perera said.
However, he noted that in volume terms, total exports last year at 319.7 million kilos was below the figures for 2011/12,"which would be considered somewhat disappointing given the all time record production in 2013."
"This is however more than compensated for by the all time record export earnings in rupee terms as well as the US dollar equivalent. These improved earnings are a result of the substantially higher FOB prices per kilo," he added.
Perera made the point that Sri Lanka is the world’s fourth largest tea producer, substantially below China which produces approximately 1,850 million kilos, India with 1,200 million kilos and Kenya with 432 million kilos. But in export volume terms, Sri Lanka ranked third behind Kenya and China.
"It is however significant that in spite of the lower quantity of exports, Sri Lanka achieved the highest revenue from tea exports," he said, noting that this demonstrated that the Colombo auction average prices were higher than those at other auction centres.
Also, tea exports from here had a much higher value added component against tea from other exporting countries. It was important to ensure that this established position is not eroded with the emergence of regional destinations for value addition.
"This should be achieved by adopting the correct strategies of maintaining the competitiveness for value added tea exports from Sri Lanka whilst safeguarding the image of pure "Ceylon Tea". This is the "WIN – WIN situation we must strive to achieve," he said.
Perera made the further point that of the five largest tea importing countries in the world – Russian Federation, UK, Pakistan, USA and Egypt, Sri Lanka has a significant market share only in Russia and it was necessary that we should try to improve our presence in the large importing countries in addition to consolidating our position in the existing as well as emerging markets.
He said that Ceylon Brokers’ performance had improved significantly in the year under review although the final profit was impacted by the provisioning of Rs.37.5 million in the year against Rs.10.9 million the previous year. Of this, Rs.23 million was for specific prudential provision covering long outstanding balances.
"Notwithstanding this charge, we are continuing our efforts to recover these dues through legal proceedings," he said.
Going forward, he said that the financial support they offer their clients will be in strict accordance with a clearly laid out credit policy and closely monitored by the Credit Review and Risk Management Committees of the company.
In keeping with the policy consistently adopted by the directors, 50% of the company’s profits were transferred to reserves and the balance distributed as dividends enabling shareholders to receive a dividend of 25 cents per share for 2013/14 paid last July. This compared with a dividend of 17 cents per share paid in the preceding financial year.
The company’s Director/CEO, Suranga Perera, said that Ceylon Tea Brokers had in a short period grown to be a major player in tea broking with a market share of over 10%. In the low grown segment they now accounted for around 15% of the market.
The company has a stated capital of Rs.128 million and retained profits of Rs.58.2 million in its books. Total assets ran at Rs.1.42 billion and total liabilities at Rs.518.6 million.
Capital Alliance Holdings with which three of the company’s directors are associated is the dominant shareholder with 81.4% of the company.
Net assets per share had grown to Rs.1.63 from Rs.1.31 and the share traded at a high of Rs.5.80 and a low of Rs.3.20 during the year against a trading range of Rs.7 to Rs.4 the previous year.
The directors of the company are: Messrs. C.P.R. Perera (Chairman), W.A.T. Fernando (MD), M.J.C.S. Perera (Director/CEO), D.G.W. De Silva, Ms. N.S.T. Cooray, Ms. H.M.S. Perera, B.R.L. Fernando and R.P. Pathirana.
www.island.lk
Ceylon Tea Brokers PLC, the only stand-alone tea broking company listed on the Colombo Stock Exchange, has seen both revenue and profit growth in the year ended March 31, 2014 with revenue up to Rs.259.19 million from the previous year’s Rs.203.82 million and an attributable profit of Rs.56.20 million, up from the previous year’s Rs.39.77 million posted.
The company’s Chairman, Mr. Chrisantha Perera, described these results as "encouraging" and said that tea production last year had reached an all-time high of 340 million kilos topping the 331.4 million kilos achieved in 2010 with a gain of 11.6 million kilos over the 2012 production.
"Low growns continue to lead the way with over 60% of the production and at 208.1 million kilos is the highest on record, surpassing the previous best of 202.1 million kilos achieved in 2012," Perera said
"High and mid grown production was also higher than 2012 at 75.8 million kilos and 56.1 million kilos respectively, although not all time records."
Tea sold at the Colombo tea auctions had performed strongly with the average prices for all categories both in rupee terms and dollar equivalents being all-time records.
"It is noteworthy to highlight that this is the first occasion tea export earnings expressed in US dollars, have surpassed US$ 1.5 billion," Perera said.
However, he noted that in volume terms, total exports last year at 319.7 million kilos was below the figures for 2011/12,"which would be considered somewhat disappointing given the all time record production in 2013."
"This is however more than compensated for by the all time record export earnings in rupee terms as well as the US dollar equivalent. These improved earnings are a result of the substantially higher FOB prices per kilo," he added.
Perera made the point that Sri Lanka is the world’s fourth largest tea producer, substantially below China which produces approximately 1,850 million kilos, India with 1,200 million kilos and Kenya with 432 million kilos. But in export volume terms, Sri Lanka ranked third behind Kenya and China.
"It is however significant that in spite of the lower quantity of exports, Sri Lanka achieved the highest revenue from tea exports," he said, noting that this demonstrated that the Colombo auction average prices were higher than those at other auction centres.
Also, tea exports from here had a much higher value added component against tea from other exporting countries. It was important to ensure that this established position is not eroded with the emergence of regional destinations for value addition.
"This should be achieved by adopting the correct strategies of maintaining the competitiveness for value added tea exports from Sri Lanka whilst safeguarding the image of pure "Ceylon Tea". This is the "WIN – WIN situation we must strive to achieve," he said.
Perera made the further point that of the five largest tea importing countries in the world – Russian Federation, UK, Pakistan, USA and Egypt, Sri Lanka has a significant market share only in Russia and it was necessary that we should try to improve our presence in the large importing countries in addition to consolidating our position in the existing as well as emerging markets.
He said that Ceylon Brokers’ performance had improved significantly in the year under review although the final profit was impacted by the provisioning of Rs.37.5 million in the year against Rs.10.9 million the previous year. Of this, Rs.23 million was for specific prudential provision covering long outstanding balances.
"Notwithstanding this charge, we are continuing our efforts to recover these dues through legal proceedings," he said.
Going forward, he said that the financial support they offer their clients will be in strict accordance with a clearly laid out credit policy and closely monitored by the Credit Review and Risk Management Committees of the company.
In keeping with the policy consistently adopted by the directors, 50% of the company’s profits were transferred to reserves and the balance distributed as dividends enabling shareholders to receive a dividend of 25 cents per share for 2013/14 paid last July. This compared with a dividend of 17 cents per share paid in the preceding financial year.
The company’s Director/CEO, Suranga Perera, said that Ceylon Tea Brokers had in a short period grown to be a major player in tea broking with a market share of over 10%. In the low grown segment they now accounted for around 15% of the market.
The company has a stated capital of Rs.128 million and retained profits of Rs.58.2 million in its books. Total assets ran at Rs.1.42 billion and total liabilities at Rs.518.6 million.
Capital Alliance Holdings with which three of the company’s directors are associated is the dominant shareholder with 81.4% of the company.
Net assets per share had grown to Rs.1.63 from Rs.1.31 and the share traded at a high of Rs.5.80 and a low of Rs.3.20 during the year against a trading range of Rs.7 to Rs.4 the previous year.
The directors of the company are: Messrs. C.P.R. Perera (Chairman), W.A.T. Fernando (MD), M.J.C.S. Perera (Director/CEO), D.G.W. De Silva, Ms. N.S.T. Cooray, Ms. H.M.S. Perera, B.R.L. Fernando and R.P. Pathirana.
www.island.lk
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