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Harrisons Malayalam has reported a first-quarter net profit of Rs 3.47 crore against a loss of Rs 3.89 crore in the same period last year. The growth in profit was backed by a spurt in income by 13 per cent to Rs 86.64 crore.
The company's net profit would have been much higher, but for the fact that it has been ploughing back a large chunk of its revenues into plantations. Already these investments have been to yield rich dividends in terms of increased productivity, better quality of products and higher unit value realisation, Mr Pankaj Kapoor, Managing Director of the company said.
Harrisons Malayalam has not only invested in its tea plantations but has also upgraded its traditional factories, bringing in the latest technology in tea production. The technology up-gradation has been extended to production of CTC and orthodox grades and returns are already evident in the prices. Quarter-on-quarter, tea prices have improved from Rs 70 a kg last year to Rs 79 a kg this year, Mr Kapoor said.
Rubber prices have, meanwhile, moved up from Rs 175 a kg last year to Rs 229 during the first quarter this year. The company's diversification into banana cultivation, pineapple, pepper and cardamom has also begun to yield results. However, much of the profit from these new activities is being reinvested. The company has already re-invested Rs 8-10 crore into these new cultivation ventures.
Meanwhile, the acquisition foray into the African continent has been put on the backburner for the moment due political unrest and economic uncertainty in the region, Mr Kapoor said. The company had earlier evaluated the possibility of acquiring and operating plantations in some African countries.
Harrisons Malayalam has also concluded that it is not worthwhile to acquire plantations in the South-East Asian region as investments in these countries do not provide the right economic opportunity.
While the company has been reinvesting in its plantation business, the income from the sector has also been looking up.
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