Sri Lanka’s Hapugastenne estate profit soars on high tea prices, asset sales

L to R: Samantha Ranatunga, Chairman, HVA Foods PLC; Jan Müggenburg, Chief Executive Officer, Müggenburg Group; Graham Stork, Chief Executive Officer, HVA Foods PLC; Sarva Ameresekere, Group Chairman, George Steuart & Co. Ltd.

August 27, 2007 (LBO) – Sri Lanka's Hapugastenne Plantations said net profit for the June quarter shot up 472 percent to 170 million rupees with the bottom line being boosted by high low grown tea prices and profit from asset sales. Revenue for the quarter was up 39 percent to 705 million rupees, according to interim results.

Channa Amaratunga, from Boston Capital, a boutique investment house, said Hapugastenne Plantations results in the first two quarters include capital gains on the sale of property, plant and equipment and that it also benefited from a sharp rise in low grown tea prices.

Asset sales brought in 51 million rupees for the quarter and a total of 96 million in the first half.

The first half net profit was up 394 percent year-on-year to 254 million rupees.

Brokers said low grown teas prices have been buoyed by strong demand from traditional buyers in the Middle East and Russia whose economies are enjoying the benefit of high oil prices.

Colombo auction prices in general rose sharply earlier this year owing to a shortage of tea caused by the effects of last year's industrial action by labour unions to back demands for higher pay.

Hapugastenne Plantations chairman Naresh Ratwatte said i

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