Escolar Documentos
Profissional Documentos
Cultura Documentos
Financial Review
FY13/14 Highlights
Revenue increased 15% YoY to LKR 6.1bn
PAT decreased 40.2% YoY to LKR434mn, Contraction in margins due to wage hike
Palm oil production up 9.0% YoY to 8.13mn kg
Tea production of 9.93mn kg remained flat compared to previous year
Rubber production 0.49mn kg, down 8.3% YoY as a result of less number of tapping
days due to rains
Watawala Plantations PLC
(WATA) reported revenue of
LKR6.1bn for the year ended 31
March 2014 (FY14), up 15% YoY.
Net profit declined to LKR434mn
for FY14, from LKR726mn
recorded in the previous year.
The overall decline in YoY PAT is
mainly attributable to the 20.0%
LKR mn
Revenue
EBIT
EBIT Margin
Profit for the period
PAT Margin
EPS (LKR)
Total Assets
Equity
FINANCIAL RATIOS
Return on equity %
Current ratio (Times)
Debt equity ratio (Times)
Interest cover (Times)
Total assets to current liabilities %
FY14
Growth
FY13
6,143
678
11.04%
434
7.07%
2.10
7,052
4,218
5,341
809
15.15%
727
13.61%
2.88
6,613
3,843
10.30
1.66
0.14
6.95
13%
18.91
1.30
0.15
10.38
17%
%
15%
-16%
-40%
-27%
7%
10%
INVESTOR RATIOS
Price earning share (Times)
Dividend per share (LKR.)
Dividend cover (Times)
Market Capitalization (Rs.000)
Net assets value per share (LKR.)
4.66
3.89
0.50
0.25
3.67
12.28
2,319,337 2,650,670
17.82
16.24
31
Revenue
Segmental Revenue
Segmental Profitability
The increased volume from Palm oil and better NSA on tea
and higher selling price yielded from Palm oil had resulted
an increase in revenue for FY14. Other main contributory
factor in FY14 was the increased revenue from exports.
Further, the actual tea quantity sold by WATA and the total
tea sold at the auction are depicted in the graph below.
Segmental Review
Tea Segment
Growth
Tea
FY14
FY13
9,926
9,888
0.4
4,165
3,656
13.9
(277)
58
nm
(28)
nm
NP (LKR mn)
NP per kg (LKR)
32
FY14
FY13
8,127
7,455
9.0
1,392
1,323
5.2
633
524
20.8
78
70
11.43
NP (LKR mn)
NP per kg (LKR)
The rubber segment which accounted for 3% of the total revenue in FY14,
experienced an 8% YoY drop in revenue to LKR169mn, from LKR184mn
recorded last year due to a decline in production by 8% YoY. The drop in
production was accounted by lower number of tapping days due to bad
weather that set in from May 2013 through till September 2013. The net loss for
rubber amounted to LKR28mn in FY14 against a loss of LKR2mn recorded last
year.
Export segment
Export sector recorded a significant improvement in revenue driven by value
added teas/herbs sold at a higher price compared to mainly bulk orders last
year. Majority of the exports were to Tata Global Beverages for their Tetley
operation in Australia, Russia, Pakistan, and India. In FY14, export revenue grew
134% YoY to LKR416mn from LKR178mn last year. Exports account for 7% of
total group revenue.
Rubber segment
Growth
Rubber
FY14
FY13
490
535
(8.4)
169
184
(8.2)
NP (LKR mn)
(28)
(2)
nm
NP per kg (LKR)
(58)
(3)
nm
Finance expenses
Year LKR.mn
Finance cost
Interest cover
2009/ 10
2010/ 11
2011/ 12
2012/ 13
2013/ 14
80
6.40
86
8.43
111
6.87
78
10.38
98
6.95
33
The finance expenditure incurred during the year has been 14% on the
operating profit. During the previous year the same has been 10%.The cost
increase is mainly to finance the addition expenses on wages which is
substantial in FY14. As a result the interest cover too had decreased 6.95
times from 10.38 times in FY13.
Year LKR. mn
Comprehensive income
Return on equity %
424
642
448
727
434
21%
21%
13%
19%
10%
34
Equity
The shareholders equity ratio reflects the
movement of shareholders funds invested
in the company along with the asset base.
During the year the shareholders equity
aggregates up to 60% of the total asset
base of the company.
Asset base
Dividends
Borrowings
Total borrowings of the company stood at
LKR 575 mn. Long term borrowings have
increased to LKR.270 mn in FY14, from
LKR.100 mn in FY13. Further short term
borrowings have declined by LKR 165 mn
due to restructuring of debt capital.
35
Cash Flow
The operating cash flow generated for the year wasLKR423 mn which was
declined by 53% compared to FY13.This was mainly due to reduction in profit
by 40% compared to FY13. The net cash generated by investing activities
was negative LKR 682 mn. As a result of debt restructuring the financing
activities recorded a positive LKR 251mn due to proceeds from bank
borrowings. The dividend payment for FY14 was LKR 59 mn as against LKR
201mn in FY13. At the end of the year company is at a positive cash position
of LKR 18 mn as against the LKR 26 mn recorded in FY13.
36
Working capital
During the year the working capital cycle has been increased by 83% with a higher
inventory and receivables. The average cycle is recorded as 55 days in comparison to
30 days in the previous year.
31/Mar/14
Rs. 000
Total current assets
31/Mar/13
Rs. 000
1,492,340
1,503,381
896,771
1,159,450
Working capital
595,569
343,931
1.66
1.30
Despite increase in working capital cycle in FY14, the current ratio of 1.66 times in
comparison to 1.30 times in FY13.
Outlook
WATA has successfully endured a tough FY14, on the back of wage hike
and tea crop losses, thanks to its diverse range of agri crops which nulled
the risk of a single commodity to the company. FY14 being a wage year,
the company had a 20% YoY increase in its staff related cost, but this was
somewhat cushioned by a good harvest for our palm oil plantations, and
strong tea prices.
With associate wages expected to be fixed during FY15, we expect WATA
to record a strong performance for the year ahead. The growth in revenue
and profitability is expected to come from our Palm oil segment, which has
been WATAs saviour in FY14. Furthermore, we are hopeful that the tea
segment will return to profits during FY15, if the market prices continues to
be buoyant.
37