Sri Lanka’s Watawala Plantations Plc expecting to return to profit in one of its diversified dairy start up units
Sri Lanka’s Watawala Plantations Plc, which has interests in palm oil and cattle farming that benefit from import duty protection, is expecting to return to profit as milk output increase in a dairy start up unit, a local media report has stated.
The firm has reportedly made a marginal Rs. 6.8 million loss in the March quarter on revenues of Rs. 566 million as profits in palm oil was outweighed by diary losses.
Managing Director Vish Govindasamy has reportedly told shareholders that the start-up farm, Watawala Dairies now had 1,128 cows including 602 lactating milch cows.
The unit has lost Rs. 90 million, including depreciation.
“The loss is in line with the projected loss due to the lower milk yields at the commencement of the lactation cycle,” Govindasamy has told shareholders in interim accounts filed with the Colombo Stock Exchange.
However, he has noted that milk yields will go up in subsequent lactations.
A herd of 240 Australian cattle, which were added to the herd will also improve milk yields, he has been quoted as saying.
The profits anticipated by Sri Lanka’s Watawala Plantations Plc through its start up diary unit is indicative of the diversifications undertaken by local businesses. Such expansions by local companies provide the opportunity to formulate partnerships with foreign companies. Therefore, foreign companies/investors could explore for companies engaged in diversifying their portfolio in order to form partnerships/joint ventures.
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