Tea Smallholder Factories cuts losses in Sept.
Tea Smallholder Factories PLC, which buys green leaves from smallholders and leaf collectors and turns them into black teas through its seven factories, managed to cut losses in the three months to September 30, 2019.
The John Keells group company reported a loss of 18 cents a share or Rs.5.5 million for the July-september quarter (2Q20), compared to a loss of Rs.32.9 million reported for the corresponding period a year ago.
The loss increased to 50 cents a share or Rs.20.4 million for the quarter with the loss from the discontinued operations.
The company sold its Pasgoda tea factory for Rs.75 million in May. It was singled out at the beginning of the year for disposing.
The revenues rose by 6.0 percent year-on-year (YOY) to Rs.542.8 million for the quarter while the cost of sales slipped one percent YOY to Rs.540.6 million, resulting in a gross profit of Rs.2.1 million.
But the operating results turned negative to Rs.6.1 million, albeit far lesser than the loss of Rs.45.1 million for the same period last year.
The company typically recognises and reports its performance across three geographical segments – Galle, Ratnapura and Nuwara Eliya. The revenue from factories in Galle and Nuwara Eliya rose during the quarter under review, with such turning into gross profits but the factories in Ratnapura continued to remain in red.
Meanwhile, for the six months ended September 30, 2019, Tea Smallholders reported an after-tax profit of Rs.1.3 million or 4 cents a share, compared to a loss of Rs.30.8 million in the same period, last year.
However, when accounted for discontinued operations, the earnings turned to a loss of Rs.12.9 million or 48 cents a share, compared to a loss of Rs.28.8 million in the corresponding period, last year.
John Keells Holdings has a 37.62 percent stake in Tea Smallholders while Akbar Brothers Limited and Central Finance Company have 24.39 percent and 22.85 percent stakes in the company, respectively, being its second and third largest shareholders.