BALA.N0000 ( BALANGODA PLANTATIONS PLC )

[yellow knifeTop contributor]

Plantation sector is not performing well. Yet we never thought that it must be so bad to eat into the Net Asset Base developed over years. At BALA. , that is happening..

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[yellow knifeTop contributor]

Revenue of BALA shows a drop.

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Column1	2015	2014	2013	2012	2011	2010
TPL	4,761,101	3,646,837	3,318,149	2,744,505	3,002,624	2,772,125
HOPL	2,164,859	2,269,092	2,220,225	2,068,933	2,079,720	1,781,125
KAHA	3,078,878	3,511,912	3,001,559	2,985,648	3,287,672	2,733,546
NAMU	2,194,906	2,092,782	1,818,556	1,858,540	2,074,678	1,516,375
KEGALLE	2,023,911	2,414,220	2,587,558	2,940,027	2,991,762	2,216,497
ELPITIYA	2,579,265	2,782,392	2,833,456	2,512,971	2,601,501	2,215,126
BOPL	2,824,297	2,763,788	2646370	2,253,813	3,080,590	2,960,384
FLCH	6,472,924	6,498,670	6,243,257	5,719,356	6,494,783	4,885,741
UDPL	1,717,498	1,549,968	1,612,181	1,313,248	1,179,279	1,390,746
BALA	2,413,055	3,002,156	3,171,983	2,779,742	2,659,168	2,797,267

[yellow knifeTop contributor]

Revenue was going down since 2013 reaching the peak.

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[yellow knifeTop contributor]

EPS is showing  massive negatives...

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Column1	2015	2014	2013	2012	2011	2010
TPL	10.08	7.31	9.09	-2.17	6.21	-0.94
HOPL	2.48	5.49	8.19	4.42	13.18	3.78
KAHA	1.46	1.46	0.31	1.57	4.34	-0.63
NAMU	6.37	14.14	15.28	14.85	17.23
KEGALLE	5.08	13.84	18.93	30.79	35.33	15.04
ELPITIYA	4.67	4.69	5.98	2.54	4.99	1.23
BALA	-14.52	-4.03	5.61	3.90	4.82	0.98

[yellow knifeTop contributor]

2016

When I write again on BALA,  plantation sector has become attractive. Yet not all companies perform equally. BALA is still lagging behind. Last years performance was studied by me first looking at Net Assets Value. Even now it is in bad shape.

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[yellow knifeTop contributor]

When all others seems to be performing well BALA is struggling .

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[slstockVeteran]

Good to see you YK.
Check some forum posts, messages /emails etc etc .
You name might be everywhere and am sure some people will be searching for you


Anyway, on BALA, I believe this is another plantation that maybe  hit by the monsoons/Floods/rain issues.Isn't it in the zone?

Though Assets wise BALA is huge and probably trading at lowest PBV in the sector ( ?), the earning is erratic.  Some reasons why didn't run a lot like others I guess.

[yellow knifeTop contributor]

Sri Lankan tea production was moving around an average of 320 Million Kilograms per annum.

Last three years shows a decline trend.

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Reasons for this down trend within three years as noted in the annual report

1. Drought
2. Restrictions in application for fertilizer
3. Ad hoc ban on pesticides chemicals

[Ethical TraderTop contributor]

Thanks YK.

[yellow knifeTop contributor]

Following chart shows that BALA is struggling in Revenue though it has reduced the loss.

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[yellow knifeTop contributor]

Colombo Tea Auction prices shows that 2016 reporting higher values compared to year 2015.

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Even in this situation BALA has failed to report profit while other plantation companies are doing well.

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The reason for this mismatch is justified in annual report stating that even though price has gone up quantity has dropped during that period. It is justifiable as we see in above chart the total output of tea industry in Sri Lanka has come down.

The challenges for tea industry are highlighted in the annual report

1. Steadily increasing cost due to higher wages and input costs

2.Diminishing workforce

3. Withdrawal of fertilizer subsidy

4. Arbitrary band on the use of chemicals

The last two factors can be assigned with imprudent government policies. Diminishing workforce was once mentioned in a Namunukula Annual report ( few years ago) stating that the youth of estates moving to cities seeking Low Paid Highly Designated jobs...

[yellow knifeTop contributor]

Rubber production of the country is also in a steep declining trend.

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Unlike tea both prices and quantity was on decline for rubber...

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[yellow knifeTop contributor]

2017 outlook

Following factors will affect to entire SL plantations specially depending on tea and rubber

1. Oil prices. It has improved from 2014/15 drop and it has positive correlation with rubber. AS many oil exporting nations are our large tea buyers it also affect to tea. Further sanctions imposed on oil exporters by US , EU also affects us. Removal of Iranian sanctions are positive for us.

2. Russia is another larger buyer of SL tea. Lessening of EU sanctions on Russia positively affect us.

 Listed companies like TPL recorded massive EPS on last quarter to conceal the accumulative negative EPS for the year. BALA who could not grab that opportunity will find it difficult to report impressive results.


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[yellow knifeTop contributor]

Net Assets position of BALA as mentioned above by SLS may be attractive but remember the company records negative EPS while all the others enjoy positive EPS

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Slow and Steady often wins the race

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TPL Net Assets report as 87.32 and BALA as 88.82

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[BackstageTop contributor]

Thanks YK, looks like the spectacles are working well.