Watawala Plantations : Quarterly Financial Report as at 30 June 2022

WATAWALA PLANTATIONS PLC 001

INTERIM CONDENSED FINANCIAL STATEMENTS

Watawala Plantations PLC

INTERIM CONDENSED FINANCIAL STATEMENTS

Quarter ended 30 June, 2022

002	WATAWALA PLANTATIONS PLC
INTERIM CONDENSED FINANCIAL STATEMENTS

Chairman's Message

Dear Shareholder,

Watawala Plantations PLC (CSE: WATA)

Watawala Plantations PLC posted a record revenue of LKR 1,852 million at group level for the quarter ended 30th June 2022 (1Q FY 22/23), up 31.9% YoY. Palm oil sector revenue was LKR 1,630 million, up 31.6% YoY driven by higher NSA offsetting drop in production volumes during the period. Profit after tax (PAT) at group level was LKR 734 million, up 1.4% YoY. The decrease in margins was mainly due to the increase in cost of fertilizer.

The net assets per share decreased to LKR 30.53 as at 30th June 2022 from LKR 34.92 as at 31st March 2022 due to the final dividend payment of LKR 8.00 for FY 21/22 during the quarter.

Watawala Dairy Limited (WDL)

Revenue was LKR 222 million for 1Q FY22/23, up 34.2% YoY due to the increase in milk price. Scarcity and inconsistency of feed resulted in a drop in milk production, which impacted the gross margin in addition to the rapid escalation of feed cost. Consequently, WDL recorded a loss of LKR 40 million compared to a profit of LKR 18 million in the same period last year.

Outlook

Global palm oil prices are volatile, and is expected to impact the NSA in the latter part of the upcoming quarter. The increase in cost of fertilizer is expected to prevail due to the removal of the fertilizer subsidy. The Company is continuing the inhouse production and application of compost fertilizer whilst exploring alternative fertilizers to maintain healthy growth and yields, whilst controlling cost.

The dairy segment is expected to further consolidate its operations with better prices in the coming quarter due to the increase in demand for fresh milk in Sri Lanka. However, the price increase is expected to be offset by the increase in the cost of feed. Sourcing feed is expected to remain challenging over the coming quarters due to the reduction in cultivation.

The management is continuously monitoring all macro-economic developments and has and is continuing to take all possible measures to ensure uninterrupted and profitable operations despite the current economic volatility.

Sunil G Wijesinha

Chairman

3 August 2022

WATAWALA PLANTATIONS PLC 003

INTERIM CONDENSED FINANCIAL STATEMENTS

Condensed Consolidated Income Statement

(all amounts in Sri Lankan Rupees thousands)

Revenue

Cost of sales

Gross profit

Other Income

Administrative expenses

Operating profits

Finance Income

Finance Costs

Net Finance Income/(Costs)

Profit before income tax

Income tax expenses

Profit for the period

Profit is attributable to:

Equity holders of the parent

Non-controlling interests

Basic earning per share (LKR)

Consolidated Statement of other Comprehensive Income

Profit for the period

Other comprehensive income

Total comprehensive income for the period

Total comprehensive income attributable to

Equity holders of the parent

Non-controlling interests

Total comprehensive income for the period

Quarter ended 30 June

2022	2021	Change
1,851,890	1,404,116	32%
(1,026,526)	(585,589)	75%
825,364	818,527	1%
13,722	34,226	-60%
(82,485)	(69,068)	19%
756,601	783,685	-3%
32,339	4,853	566%
(23,290)	(18,114)	29%
9,049	(13,261)	n/a
765,650	770,424	-1%
(31,935)	(46,677)	-32%
733,715	723,747	1%
738,131	722,694
(4,416)	1,053
733,715	723,747
3.61	3.56
733,715	723,747	1%
-	-
733,715	723,747	1%
738,131	722,694
(4,416)	1,053
733,715	723,747

004	WATAWALA PLANTATIONS PLC
INTERIM CONDENSED FINANCIAL STATEMENTS

Condensed Company Income Statement

(all amounts in Sri Lankan Rupees thousands)

		Quarter ended 30 June
		2022		2021		Change %
Revenue		1,629,801		1,238,781		32%
Cost of sales		(778,537)		(428,784)		82%
Gross profit		851,264		809,997		5%
Other Income		9,955		14,139		-30%
Administrative Expenses		(78,141)		(66,200)		18%
Operating profits		783,078		757,936		3%
Finance Income		32,316		6,445		401%
Finance Costs		(11,507)		(11,873)		-3%
Net Finance Income/(Costs)		20,809		(5,428)		n/a
Profit before income tax		803,887		752,508		7%
Income tax expenses		(30,435)		(46,677)		-35%
Profit for the period		773,452		705,831		10%
Basic earning per share (LKR)		3.80		3.47
Consolidated Statement of other Comprehensive Income
Profit for the period		773,452		705,831		10%
Other comprehensive income		-		-
Total comprehensive income for the period		773,452		705,831		10%
Total comprehensive income attributable to
Equity holders of the parent		773,452		705,831
Total comprehensive income for the period		773,452		705,831

							WATAWALA PLANTATIONS PLC	005
					INTERIM CONDENSED FINANCIAL STATEMENTS
Condensed Statement of Financial Position
(all amounts in Sri Lankan Rupees thousands)
		Group			Company
As at		30.06.2022			31.03.2022		30.06.2022		31.03.2022
Assets
Non-current assets
Right of use assets		253,136			235,995		256,105		238,645
Property, plant and equipment		2,520,657			2,342,362		1,138,306		943,491
Intangible assets		27,426			28,276		24,749		25,307
Biological Assets -Bearer		2,685,516			2,698,963		2,623,023		2,631,545
Biological Assets-Consumable		33,783			33,783		-		-
Biological Assets -livestock		966,653			943,200		-		-
Investment fund		74,353			72,313		74,353		72,313
Investment in subsidiaries		-			-		2,252,061		2,163,390
Goodwill on acquisition		88,671			-		-		-
Total Non-Current Assets		6,650,195			6,354,892		6,368,597		6,074,691
Current assets
Inventories		434,564			245,923		336,218		193,065
Biological assets-produce on bearer plants		71,671			71,671		71,671		71,671
Current tax assets		20,679			20,679		20,679		20,679
Trade and other receivables		427,175			256,348		363,723		229,617
Amount due from related parties		113,033			255		142,892		4,101
Short term investment		137,345			514,914		104,076		482,811
Cash and cash equivalents		1,756,838			1,427,013		1,749,113		1,412,534
Total Current Assets		2,961,305			2,536,803		2,788,372		2,414,478
Total assets		9,611,500			8,891,695		9,156,969		8,489,169
Equity and Liabilities
Capital and Reserves
Stated capital		511,848			511,848		511,848		511,848
Retained earnings		5,457,598			6,345,936		5,767,099		6,620,116
Equity attributable to owners of the Company		5,969,446			6,857,784		6,278,947		7,131,964
Non controlling interests		237,471			241,887		-		-
Total Equity		6,206,917			7,099,671		6,278,947		7,131,964
Non-current liabilities
Interest bearing borrowings		225,699			227,505		-		-
Lease liabilities		273,607			254,050		282,907		263,351
Retirement benefit obligations		210,560			212,629		185,776		186,682
Deferred income and capital grants		40,853			41,442		40,853		41,442
Deferred tax liability		325,938			316,938		269,158		261,658
Total Non-Current Liabilities		1,076,657			1,052,564		778,694		753,133
Current liabilities
Interest bearing borrowings		113,027			145,070		16,750		45,500
Lease liabilities		2,337			2,363		1,637		1,399
Trade and other payables		2,066,650			559,994		2,019,150		520,112
Amount due to related parties		115			31,259		4,309		37,061
Current tax liabilities		22,934			774		22,934		-
Bank overdrafts		122,863			-		34,548		-
Total current liabilities		2,327,926			739,460		2,099,328		604,072
Total liabilities		3,404,583			1,792,024		2,878,022		1,357,205
Total equity and liabilities		9,611,500			8,891,695		9,156,969		8,489,169
Net assets per share		30.53			34.92		30.88		35.08

It is certified that these financial statements have been prepared in compliance with the requirements of the Companies Act No 07 of 2007.

Eranda Kapukotuwa

Senior Manager-Finance

The Board of Directors is responsible for the preparation and presentation of these financial statements. Approved and signed for and on behalf of Directors of Watawala Plantations PLC.

V Govindasamy	Sunil G Wijesinha
Director	Chairman

3 August 2022 Colombo