5th Aug 2014 11:01
LONDON (Alliance News) - Camellia PLC delivered a gloomy trading update on Tuesday, saying its first-half results are set to be significantly below expectations and that it will probably post a loss for the period.
Along with the forecast of a loss in the first half, the group said the second half is unlikely to offset the problems seen in the first, despite saying its performance is weighted to the second half of the year.
The agricultural and horticultural group said weather conditions had heavily impacted some of its operations, including lost tea production in India and Bangaldesh owing to droughts and a severely damaged citrus crop in California as a result of frost, all of which did significant damage to production volumes.
The group said Indian tea sales have been satisfactory, but said those in Bangladesh have been substantially lower year-on-year. Sales prices in Bangladesh, though showing signs of improvement, remain materially lower than last year.
The performance of its African tea businesses also remains disappointing, Camellia said, owing to lower tea sales prices in Kenya and Malawi.
The company posted a substantial loss related to changes in the fair value of its Biological Assets business, driven primarily by the revaluation of the Malawi kwacha against the dollar in the first half.
The group also confirmed the previously announced challenging trading for its AKD engineering and Duncan Lawrie arms.
Duncan Lawrie, a private bank, saw income decline due to falls in banking and investment management income and additional costs related to changes to its management team. AKD's performance has been impacted by an ongoing legal dispute.
Camellia will publish its interim results on August 28.
Camellia shares were down 4.2% to 9,880.25 pence on Tuesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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