• Revenue increased 15% YoY to LKR 6.1bn
• PAT decreased 40.2% YoY to LKR434mn, Contraction in margins due to wage hike
• Palm oil production up 9.0% YoY to 8.13mn kg
• Tea production of 9.93mn kg remained at compared to previous year
• Rubber production 0.49mn kg, down 8.3% YoY as a result of less number of tapping days due to rains
Watawala Plantations PLC
for FY14, from LKR726mn
 The overall decline in YoY PAT is
mainly attributable to the 20.0%
 YoY wage hike which came into
effect from April 2013, which
increased the cost of production
across all crops. Other income
also contracted in FY14 to
LKR90mn, down 36% YoY.
 The Financial Review relates
parent Company unless
performance.
PAT Margin 7.07% 13.61%
Equity 4,218 3,843 10%
Debt equity ratio (Times) 0.14 0.15
Interest cover (Times) 6.95 10.38
 Total assets to current liabilities % 13% 17%
INVESTOR RATIOS
Dividend cover (Times) 3.67 12.28
Market Capitalization (Rs.’000) 2,319,337 2,650,670
Net assets value per share (LKR.) 17.82 16.24
Company’s proftability since 1996:
LKR mn
the nancial year FY14 from tea, rubber, palm oil and
export segments. This had resulted in a growth of 15% in
comparison to the previous year.
 The increased volume from Palm oil and better NSA on tea
and higher selling price yielded from Palm oil had resulted
an increase in revenue for FY14. Other main contributory
factor in FY14 was the increased revenue from exports.
Further, the actual tea quantity sold by WATA and the total
tea sold at the auction are depicted in the graph below.
Segmental Review
Segmental Revenue
Segmental Proftability 
Tea Segment
NP per kg (LKR) (28) 9 nm
 Tea segment, the largest revenue contributor which accounted for
over 68% of the total revenue, increased 14% YoY to LKR4.2bn
in FY14, mainly on the back of improved tea prices, and a slight
increase in production volumes in FY14. Tea NSA (Net Sale Average)
for FY14 improved to LKR418 /kg, up LKR18 /kg from last year.
 The increased volumes experienced during 2HFY14, on the back of
favorable weather conditions, mitigated the crop loss experienced
due to heavy rainfall during 1QFY14. Tea production was recorded
 
a prot of LKR85mn previous year. The loss
is mainly attributed to a 20% YoY wage hike,
effective from April 2013, which resulted in an
increase of average production cost by LKR38
per kg. As a result, the total negative impact on
cost of sales amounted to LKR379mn for FY14.
 Although this was common for all 3 crops, Tea
was the worst hit as it requires the most number
of associates per hector.
NP per kg (LKR) 78 70 11.43
Rubber
Growth
NP per kg (LKR) (58) (3) nm
Palm Oil segment registered a revenue growth
of 5% YoY to reach LKR1.4bn in FY14, which
accounted for 23% of the company’s revenue
during the year. The revenue growth was mainly
driven by an impressive increase in Fresh Fruit
Bunch (FFB) Yield, recorded at 16,833 kg
per ha in FY14, from 15,826 kg per ha in the
previous year, resulting from the adoption of
good agricultural practices over the last few
years, in line with the company’s agriculture
policy. The CPO production grew 9% YoY to
8.13mn kg for FY14 from 7.46mn kg recorded
last year. The segment maintained its position as
the highest contributor to company protability,
having made a net prot of LKR633mn for FY14.
WATA continues to be the single biggest CPO
producer in Sri Lanka.
Rubber segment
 The rubber segment which accounted for 3% of the total revenue in FY14,
experienced an 8% YoY drop in revenue to LKR169mn, from LKR184mn
recorded last year due to a decline in production by 8% YoY. The drop in
production was accounted by lower number of tapping days due to bad
weather that set in from May 2013 through till September 2013. The net loss for
rubber amounted to LKR28mn in FY14 against a loss of LKR2mn recorded last
year.
Export segment
Export sector recorded a signicant improvement in revenue driven by value
added teas/herbs sold at a higher price compared to mainly bulk orders last
year. Majority of the exports were to Tata Global Beverages for their Tetley
operation in Australia, Russia, Pakistan, and India. In FY14, export revenue grew
134% YoY to LKR416mn from LKR178mn last year. Exports account for 7% of
total group revenue.
Financial performance per Employee
 The revenue and prots generated per employee has been LKR532/-. and
LKR38/- respectively.
Finance expenses
 Year LKR.mn 2009/ 10 2010/ 11 2011/ 12 2012/ 13 2013/ 14
Finance cost 80 86 111 78 98
Interest cover 6.40 8.43 6.87 10.38 6.95
 
34
 The nance expenditure incurred during the year has been 14% on the
operating prot. During the previous year the same has been 10%.The cost
increase is mainly to nance the addition expenses on wages which is
substantial in FY14. As a result the interest cover too had decreased 6.95
times from 10.38 times in FY13.
Return on Equity (ROE)
 The company generated a return on equity of 10% for the nancial year as
against 19% for the previous year. Reduction is mainly due to reduction in
protability in FY14. In the last three years as shown in the graph the directors
have retained more prots for longer sustainability.
Return on Assets (ROA)
 The company has been able to generate a return of 6% using the total asset
base during the nancial year. The decline in ROA is mainly due to reduction
in protability for the year.
Basic Earnings per share (EPS)
During the nancial year the company has generated
LKR2.10 prot for each unit of shares. (Total Ordinary
shares: 236.67mn). EPS have been calculated on
continuing operations as recommended by LKFRS /
LKAS.
share was LKR2.73 for the year where the same has
been LKR4.47 in 2013/14.
Price earnings ratio (PER)
for Watawala share. During the previous year this
has been 3.89. The year closed with a market
price of LKR9.80 per share of the company traded
at Colombo Stocks Exchange. (LKR.11.20 as at
31/03/2013)
It appears that in the year under review the share
value has fallen in relation to earnings.
 Year LKR. mn 2009/10 2010/11 2011/12 2012/13 2013/14
Comprehensive income 424 642 448 727 434
Return on equity % 21% 21% 13% 19% 10%
 
movement of shareholders’ funds invested
in the company along with the asset base.
During the year the shareholders equity
aggregates up to 60% of the total asset
base of the company.
Market value added (MVA)
ability of a company to the shareholders’
funds invested. MVA is arrived at by
subtracting the shareholder funds from
the market value of shares. During the
nancial year 2013/14 the market value
addition has deteriorated by LKR 1,899
mn due to lower market price traded at
the stock exchange. The company also
has increased its shareholders funds
year on year. The market price as at
31.03.2014 was recorded at LKR9.80
Enterprise value (EV)
takeover price of a company hence it is
Dividends
a nal dividend of LKR.0.50 per share
amounting to LKR.118.33 mn. Dividend
paid in FY13 was LKR. 0.25 pre share.
 The Cumulative Average Dividend Payout
(DPO) of the company from 1996 to
nancial year FY14 is approximately 22%
this is equivalent to LKR 787 mn.
Borrowings 
due to restructuring of debt capital.
Debt Ratio (Debt to Assets) of the
company reduced to 8% during the year
from 9% recorded in the prior year. This
was mainly due to an increased asset
base in the year FY14.
Debt to equity ratio had increased to 6%
due to higher long term debts.
 Asset base
of FY14 stood at LKR 7.05bn with non-
current assets of 79% and 21% of current
assets.
LKR 617mn on capital expenditure which
includes massive replanting phase of
palm oil and tea amounting to LKR.331
mn. Total capital expenditure incurred has
been 10% of the Revenue generated for
the year.
During the year EV of the company is at
LKR2.8 bn previously LKR3.1 bn recorded
in FY13.
Cash Flow
 The operating cash ow generated for the year wasLKR423 mn which was
declined by 53% compared to FY13.This was mainly due to reduction in prot
by 40% compared to FY13. The net cash generated by investing activities
was negative LKR 682 mn. As a result of debt restructuring the nancing
activities recorded a positive LKR 251mn due to proceeds from bank
borrowings. The dividend payment for FY14 was LKR 59 mn as against LKR
201mn in FY13. At the end of the year company is at a positive cash position
of LKR 18 mn as against the LKR 26 mn recorded in FY13.
Free cash fow (FCF)
 The free cash ow is the net cash generated by a company after providing
funds for enhancement of the asset base by way of capital expenditure. For
the nancial year FY14 the FCF for the company is LKR.195 mn negative in
comparison to positive LKR 417 mn in the previous year. This has been due to
 
Less: Total current liabilities 896,771 1,159,450
Working capital 595,569 343,931
Current ratio (times) 1.66 1.30
Despite increase in working capital cycle in FY14, the current ratio of 1.66 times in
comparison to 1.30 times in FY13.
Outlook 
WATA has successfully endured a tough FY14, on the back of wage hike
and tea crop losses, thanks to its diverse range of agri crops which nulled
the risk of a single commodity to the company. FY14 being a ‘wage year’,
the company had a 20% YoY increase in its staff related cost, but this was
somewhat cushioned by a good harvest for our palm oil plantations, and
strong tea prices.
With associate wages expected to be xed during FY15, we expect WATA
to record a strong performance for the year ahead. The growth in revenue
and protability is expected to come from our Palm oil segment, which has
been WATA’s saviour in FY14. Furthermore, we are hopeful that the tea
segment will return to prots during FY15, if the market prices continues to
be buoyant.
Working capital
During the year the working capital cycle has been increased by 83% with a higher
inventory and receivables. The average cycle is recorded as 55 days in comparison to
30 days in the previous year.