Watawala Plantations to inject Rs.365mn to dairy business

Watawala Plantations PLC this week announced plans to infuse Rs.365 million into the capital of its dairy subsidiary Watawala Dairy Limited (WDL).

In return, Watawala Dairy Limited will issue 31.9 million of its shares priced at Rs.11.42 each to Watawala Plantations PLC.

WDL runs a dairy farm, which is home to Australian and New Zealand cattle breeds, and produces fresh cow milk.  As at March 31, 2022, Watawala Plantations PLC held 89 percent direct stake in Watawala Dairy Limited. 

For the quarter ended June 30, 2022 (3Q23), Watawala Dairy Limited reported revenue of Rs.222 million, up 34.2 percent YoY, largely due to the increase in milk prices.

“Scarcity and inconsistency of feed resulted in a drop in milk production, which impacted the gross margin in addition to the rapid escalation of feed cost,” the company said.
 Consequently, the company recorded a loss of Rs.40 million compared to a profit of Rs.18 million in the same period last year.