Maskeliya Plantations PLC (MPL), controlled by the Richard Pieris group, has achieved its most successful financial year in history by posting the highest ever turnover together with its highest earnings since 1998 in the year ended March 31, 2013, the company’s Chairman Dr. Sena Yaddehige has said in the company’s annual report.
Yaddehige said that although adverse weather conditions pushed down production at Maskeliya by 2% to 9 million kg from a year earlier, good prices had helped the company to grow turnover 14% to Rs.3.6 billion and posting a profit after-tax of Rs.260 million for the year against a loss of Rs.259 million the previous year.
Maskeliya is diversifying into rubber in the Bandarawela region and have planted 50 ha at Ampitiakanda Estate and 44 ha at Poonagala. It has also planted nearly 40 acres cinnamon in Ampitiakanda, Poonagala and Sapugaskanda and undertaken a special fruit cultivation project growing mandarins and oranges on 25 ha in the lower elevations of Poonagala.
The company is also looking at dendro power and has embarked on a first step to plant all uncultivated land on its estates at Bandarawela region with gliricidia, the report said.
Long-term benefits from crop diversification are envisaged, it added.
Yaddehige commented that the cost of tea production in Sri Lanka is still the highest in the world with the Central Bank reporting that the cost of production (COP)of tea here stood at Rs.291 in 2012. The proposed wage increase had also pushed up COP by a further Rs.40 since April and the annual impact of this increase on the company would be a significant Rs.340 million without taking related gratuity adjustments into account.
"Hence, I strongly believe that a strategic approach towards wage negotiations will determine the survival of our plantations in the future," Yaddehige said.
"There is a pressing need to consider the sustainability of the industry during this wage negotiation process so that it would be linked to the productivity of the employee as well. Failure to do so will reflect adversely on the feasibility of the industry."
The year under review had seen Maskeliya raising Rs.323.7 million through a one for one rights issue of 27 million new shares at Rs.12 each.
The company has a stated capital of Rs.673.7 million, a general reserve of Rs.540 million, timber reserves of Rs.485.7 million and accumulated losses of Rs.128.9 million in its books.
Total assets stood at Rs.4.26 billion, non-current liabilities at Rs.2 billion and current liabilities at Rs.0.7 billion.
RPC Management Services with 83.40% of the company is the major shareholder with all other shareholders individually owning less than 2% each.
The Maskeliya share traded at a high of Rs.21 and a low of Rs.10 during the year under review with net assets per share down to Rs.29.11 from Rs.36.26 the previous year.
A management fee of Rs.184.1 million, up from Rs.130.8 million the previous year, had been paid to the parent company.
The directors of the company are: Dr. Sena Yaddehige (Chairman), J.H.P. Ratnayeke (Deputy Chairman), S.S. Poholiyadde (w.e.f. 15.08.2012), S.P. Jayakoddy (Resigned w.e.f. 13.08.2012), Dr. S.A.B. Ekanayake (Resigned w.e.f. 31.08.2012), Dr. H.S.D. Soysa and E.M.M. Boyagoda (w.e.f. 02.05.2013).