Following is the summary of chairman’s message on Hapugastenne Q2 report.
http://www.cse.lk/cmt/upload_report_file/708_1313056363466.pdfNaresh Ratwatte wrote: Revenue during the period declined by 8%, as a result of the drop in the production of tea during the first quarter and then a sharp drop in the price of Tea at the Colombo auctions during the second quarter. The increase in quantities on offer at the auctions during the second quarter, the political turmoil in the middle eastern countries and the strengthening of the Sri Lankan Currency against the US $ did impact on the prices.
The wage increase of 27% effective from the 1st of April 2011, did impact on the results of the second quarter and is expected to cost the company an additional Rs. 550 Mn, which includes the increase in the provision for terminal benefits.
& Udupussellawa plantations plc Q2 report he mentioned
http://www.cse.lk/cmt/upload_report_file/727_1313056303620.pdfNaresh Ratwatte wrote: The company recorded a loss of Rs. 43 Mn during the six months ending 30thJune 2011, against a profit of Rs. 90 Mn during corresponding period of 2010.
Revenue during the period declined by 10%, as a result of the drop in volume during the first quarter and then the sharp drop in the price of Tea at the Colombo auctions. The traditional Nuwara Eliya flavoury season failed due to unfavorable weather conditions. The prices of Nuwara Eliya Tea declined by over Rs.40/-compared to the same period of previous year. This had a significant impact on the results during the period under review.
The wage increase of 27% that was effective from the 1stof April 2011, did impact on the results during the second quarter and is expected to cost the company an additional Rs. 250 Mn, which includes the increase in the provision for terminal benefits..
But a plantations lover in this forum continuously praised these plantation sector counters few months ago. It was not just one off but many many times. He gave a hell of lot examples & told many fairytales to us. If I can recall some of these are Low P/E, Low PBV, wage hike is negligible, timber sales, high tea/rubber prices etc. Simply he wanted us to think why we do not buy plantation sector shares.
No matter what I must say he’s a quite knowledgeable person but horribly went wrong with plantation sector calculations.
This plantation lover in this forum likes to say “ X “ results is out as I predicted but hes extremely quiet about these plantation sector companies results.
Overall......well said Naresh Ratwatta.