What is ailing HOPL ?

Kithsiri · 1 What is ailing HOPL ? Sat Mar 31, 2012 1:46 pm

Kithsiri

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What is ailing HOPL ?
Last year they paid 4/= and thereafter it is on downward trend.
It cannot be labour troubles alone because some plantations have come up with good numbers recently.

Kithsiri · 2 Re: What is ailing HOPL ? Sun Apr 01, 2012 10:00 pm

Kithsiri

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Any comments from the Plantation specialists? Cool

greedy · 3 Re: What is ailing HOPL ? Sun Apr 01, 2012 11:29 pm

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What is see from HOPL accounts is that even an intelligent trader has bought shares at LKR60 and still holding it. I don't see any immediate upward trend. However, this share may have reached its bottom. Current prices are closed to 2005 prices.

One also should note that reduced management fees for a three year period starting from 1 April 2008 comes to an end on 31/03/2011. The usual rates comes into effect from 1 April 2011.

Usual Management Fee from 1 April 2011

As per the Management Agreement signed between the Company and the Managing Agent, Ceytea Plantation Management Ltd., on 15th July 2005, the basis of computing management fee is on Earnings Before Interest received/Paid, Corporate Tax, Depreciation, Amortisation and Management Fees (EBIDTA). (The rate applicable for the year under review is 10% of EBIDTA or Rs.30 Million, whichever is lower)

Reduced Rate for the period from 1 April 2008 to 31 March 2011

As per the Management Agreement signed between the Company and the Managing Agent, Ceytea Plantation Management Ltd., on 15th July 2005, the basis of computing management fee is on Earnings Before Interest Received/Paid, Corporate Tax, Depreciation, Amortisation and Management Fees (EBIDTA). The rate applicable for the year under review is 5% of EBIDTA or Rs.15 Million, whichever is lower.

sanjeewa88 · 4 Re: What is ailing HOPL ? Mon Apr 02, 2012 12:02 am

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As at 31/3/2011 it has recorded a brilliant EPS Rs. 13.08

But when we consider about the nine months ended 31/12/2011 following financial results have been shown.

--------------------------31-12-2011--------------------31-12-2010

Net Profit------------------19.361 mn--------------------170.799 mn
EPS------------------------0.77--------------------------6.83

Tea has incurred a gross loss of 151 mn during the nine months of 2011.

Rubber sector contributed to the total profit of 103.655 mn by adding 183.674 mn to gross profit.

But the NAVPS still at 39.22 as at 31-12-2011.

Under this circumstances we cannot expect a good result in this year compared to the last year.

There are several reasons to this poor performance of HOPL including wages hike in the mid year.

Anyway we cannot forecast a big share price increment in HOPL unless a manipulation.

Last edited by sanjeewa88 on Mon Apr 02, 2012 12:10 am; edited 1 time in total (Reason for editing : word alignment)

greedy · 5 Re: What is ailing HOPL ? Mon Apr 02, 2012 12:24 am

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sanjeewa88 wrote:As at 31/3/2011 it has recorded a brilliant EPS Rs. 13.08

But when we consider about the nine months ended 31/12/2011 following financial results have been shown.

--------------------------31-12-2011--------------------31-12-2010

Net Profit------------------19.361 mn--------------------170.799 mn
EPS------------------------0.77--------------------------6.83

Tea has incurred a gross loss of 151 mn during the nine months of 2011.

Rubber sector contributed to the total profit of 103.655 mn by adding 183.674 mn to gross profit.

But the NAVPS still at 39.22 as at 31-12-2011.

Under this circumstances we cannot expect a good result in this year compared to the last year.

There are several reasons to this poor performance of HOPL including wages hike in the mid year.

Anyway we cannot forecast a big share price increment in HOPL unless a manipulation.

You are correct about their profitability drop. I expect a slight improvement in March Profit due to rupee depreciation. And we should also consider that current financial year has a additional gratuity provision of LKR50mn & 75% of that has been provided as of 31/12/2011.

The share price has dropped from all time high of LKR96 in 8 Feb 2011 to 25.00 as of 31 March 2012.

I do not hold HOPL.

illuminati · 6 Re: What is ailing HOPL ? Mon Apr 02, 2012 9:16 pm

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The simple reason why plantation shares are in negative territory is because of another wage hike end of this year as per the collective agreement. That will be the death blow to the already struggling plantation industry especially for Tea companies.

greedy · 7 Re: What is ailing HOPL ? Tue Apr 03, 2012 3:15 am

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illuminati wrote:The simple reason why plantation shares are in negative territory is because of another wage hike end of this year as per the collective agreement. That will be the death blow to the already struggling plantation industry especially for Tea companies.

Is that end of this year OR mid of next year 2013. My understanding is that these agreements are valid for two years. and last agreement was signed in June 2011.

And also this is not the only reason for plantation stocks drop from all time highs. Other reasons were general bear market trend & world rubber & Tea prices as well.