Madulsima Plantations PLC, a Sri Lankan company specializing in tea, recorded a total revenue of Rs. 2.83 billion, with total assets amounting to Rs. 71.2 billion for the 2020 financial year, according to its annual report.
Madulsima Plantations Chairman/Managing Director D.H.S. Jayawardena introduced the annual report and audited financial statements of the company for 2020 with a few of his insights on the year that had ended.
“The company recorded a strong turnaround performance for the 2020 financial year amidst many socio-economic challenges with the Covid-19 pandemic that prevailed during the year under review,” Jayawardena commented.
Accordingly, the company saw a nearly 42% increase in the total revenue of Rs. 2.83 billion for 2020, when compared to the total revenue of Rs. 2 billion in 2019.
“For 2020, the company recorded an operational profit before finance cost and taxation of Rs. 186 million, and an after-tax loss of Rs. 201 million, when compared with the previous year’s operational loss before finance cost and taxation of Rs. 435 million, and an after-tax loss of Rs. 764 million,” Jayawardena stated.
The annual report also noted that improved tea prices with lower cost of production per kg, along with reduced finance costs, have primarily contributed to the company remarkably outperforming last year’s financial results.
Also, Madulsima Plantations revenue reported an all-time high production volume of 5.084 million kg after five years, even though the tea industry plunged to an all-time production low after 23 years.
“The bounce back of higher production volumes is a result of the company rightly investing in the upliftment of its agricultural standards, factory production expansion, and equipment upgrading programmes. This will place the company in a stronger and more sustainable future,” Jayawardena commented.
Accordingly, the national auction prices have increased by Rs. 88.48 compared to 2019. The Gross Sales Average (GSA) of the company for tea in 2020 increased to Rs. 549.46 per kg from Rs. 474.11 per kg recorded in 2019, which is an increase of Rs. 75.35 per kg.
Madulsima Plantations also mentioned that its Board of Directors took very drastic steps to mitigate losses by introducing several reforms and making many changes at the grassroots level.
“This year’s production is the highest for the last five years. Yield is also the highest for the last five years, and revenue also the highest for the last five years. With the co-operation of all staff, these figures are reached, and the management hopes that next year, with these prices and more productivity and taking many agricultural corrections, we can pay dividends to the shareholders,” Jayawardana stated.
He further stated that management has taken steps to diversify the crops with more cinnamon and cardamom plantation, rehabilitating all these abandoned estates and bringing them back to production.
On the other hand, the report also included sustainability aims of the company in identifying the various dimensions of its business and how the firm operates in the social, cultural, and economic environment.
The company’s estates also recorded a combined production of 5.08 million kg of made tea for 2020. This was noted to be the highest recorded quantity of made tea since 2015 where 5.01 million kg was produced.
The report also mentions the company estates’ yield per hectare, reflecting a similar growth pattern where 1,077 kg of made tea per hectare was achieved. This was also noted as an increase of 177 kg per hectare, and a year-on-year increase of 19.67%.
Lastly, expressing regrets to its shareholders, the company also mentioned that the directors have not recommended dividends for 2020, while also informing that Madulsima Plantations is looking forward to a new financial year with utmost confidence and firm dedication.