Stocks of Sri Lankan tea plantation company on the increase
Sri Lanka’s Hatton Plantations has reportedly closed 80 cents higher at Rs. 8.60 on its debut on the Colombo Stock Exchange (CSE) on Friday, up 10.26 percent from its opening price.
According to reports, over 236.6 million ordinary voting shares were listed on the Colombo Stock Exchange, by way of an introduction at 7.80 rupees per share.
Hatton Plantations was incorporated in September 2017 and is the segregated upcountry tea businesses of listed Watawala Plantations (down 10 cents to Rs. 28.50).
“We segregated the up country tea business so we could focus and formulate better strategies for tea plantations. It will result in better results, notwithstanding external variables,” Sunil Wijesinhe, Chairman of Hatton Plantations has been quoted as saying in a local news report.
“The legal, technical and accounting aspects of the segregation were quite a journey and it’s going to be rewarding,” Wijesinhe has said
The upcountry tea business has also accounted for 59% percent of Watawala Plantation’s total revenue of Rs. 6.4 billion in 2016/17, but accounted for less than 20 percent to its Rs. 1.7 billion gross profits with palm oil contributing 76 percent. Watawala has interests in dairy farming and exports as well.
Restated financial statements for Hatton Plantations show an after tax earnings of Rs. 28.4 million in 2016/17, compared to a loss of Rs. 300.2 million a year earlier.
The increase of the value of stocks of Hatton Plantations is an encouraging sign for further investments by way of share purchases of other plantation companies listed in the Colombo Stock Exchange. The Sri Lankan tea industry after recording an increase in production and revenue last year is expected to record a further growth this year. This could result in a further increase in the value of tea plantation company stocks in Sri Lanka.
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