Maskeliya Plantations Plc., a member of the Richard Pieris Group, has reported a loss for the second year running in the year ended March 31, 2015 posting an after tax loss of Rs. 184.1 mn., up from a loss Rs. 92.2 mn. the previous year. The company is now carrying retained losses of Rs. 546 million on its balance sheet.
The company which has 18 tea estates, holding a land base of 10,560 ha. up-country is mainly a tea grower with 7,845 ha. under tea.
Maskeliya has an average production of around nine million kilograms of high grown tea and its various estate marks command a high reputation for quality, the company said in its latest annual report.
Maskeliya is controlled by RPC Management Services (Pvt.) Ltd., owning 83.34 % of its equity.
The company’s chairman, Dr. Sena Yaddehige, attributed adverse weather conditions and falling tea prices that have declined since August last year with demand from the CIS and Middle Eastern countries slowing to the company’s dismal performance during the year under review.
"Despite adverse weather conditions and low global tea prices, the company’s turnover increased by 3% to Rs. 3.5 bn. against a decline of 4% experienced the previous year," he noted. "However, company profitability declined sharply."
Despite the losses Maskeliya had continued its capital expenditure program spending Rs. 204 mn. on this account during the year under review, down from Rs. 243.3 mn. the previous year. This expenditure has been mainly on field development of tea, rubber, cinnamon and fruit cultivation with Rs. 40 mn. invested on property, plant and equipment.
"The company is expected to maintain the diversification of cultivations in the upcoming year as well," Yaddehige said. Avocado, pears and citrus are among the fruit crops grown.
He expected the current crises in Russia and the Middle East to continue in the foreseeable future and said that it is unlikely that the Sri Lanka tea industry will benefit from stronger demand for Ceylon Tea.
Stressing the pressing need for linking productivity to wages, he said that failing to do this could reflect adversely on the viability of the tea industry. "I strongly believe that a strategic approach towards wage negotiations in future will determine the survival of the plantations," he said.
Yaddehige also reported that they were continuing to experiment on the conversion of garbage collected within the estates into compost. They were also looking at introducing mechanical harvesting in an effort to control the cost of production.
Maskeliya was pressing on with their tea replanting program as well as in-filling of vacancies and plan to plant 50 ha. of rubber and 25 ha. of citrus on their estates.
Maskeliya has a stated capital of Rs. 673.7 mn., a general reserve of Rs. 540 mn. and timber reserves valued at Rs. 561.5 mn. in its books. Retained losses had grown to Rs. 546 mn. from Rs. 321.8 mn. the previous year.
A management fee calculated at 3.5% of gross turnover, 2% on supplies, 50 cents per kg on tea crop and 5% of profit is made to the managing agent of the company, RPC Management Services which is the controlling shareholder. According to the profit and loss statement this amounted to Rs. 150.9 mn. in the year under review, up marginally from Rs. 150.4 mn. a year earlier.
RPC Management Services with 83.4% is the major shareholder. All other shareholders individually own less than 2%.
The Maskeliya share closed at Rs. 9.70 in the year under review trading at a low of Rs. 9.70 and high of Rs. 16.
The directors of the company are Dr. Sena Yaddehige (Chairman), Messrs. Paul Ratnayeke (Deputy Chairman), S S Poholiyadde (CEO), Dr. H S D Soysa, Mangala Boyagoda, Dr. L S K Hettiarachchi and J L A Fernando.
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