COLOMBO, Sri Lanka – August 25, 2026 – HVA Foods PLC (CSE: HVA), a leading Sri Lankan tea company, has announced a significant strategic turnaround, reporting a return to profitability and robust financial performance in its Annual Report for the financial year ended March 31, 2026. The report, published on August 24, 2026, highlights the company’s resilience and effective execution of its strategic priorities amidst a complex global operating environment.
Key Financial Highlights Signal Strong Recovery
HVA Foods PLC recorded impressive growth across key financial indicators, reversing a previous year’s loss to deliver a positive outcome for shareholders:
- Revenue Growth: The Group achieved a 24% increase in revenue, reaching Rs. 2.27 billion, up from Rs. 1.83 billion in the previous financial year.
- Return to Profitability: The most notable achievement was the return to profit for the year, posting Rs. 7.10 million, a stark contrast to the Rs. 139.93 million loss recorded in the prior year.
- Gross Profit Surge: Gross Profit soared by 91% to Rs. 330.15 million, with the Gross Profit Margin improving significantly from 9% to 15%.
- Operating Profit Resurgence: The company returned to operating profitability, recording an Operating Profit of Rs. 101.93 million, a substantial recovery from an Operating Loss of Rs. 19.01 million in 2024/25.
- Earnings Per Share (EPS): Basic Earnings Per Share improved to Rs. 0.03 from a loss per share of Rs. 0.78, indicating enhanced shareholder value.
- Market Value Appreciation: The market value per share doubled to Rs. 7.00, reflecting growing investor confidence.
- Total Assets Increase: Total assets grew by 10% to Rs. 1.24 billion, supported by increased current assets to facilitate higher business activity.
Strategic Interventions Drive Performance
According to the Chairman’s Message, the turnaround was a direct result of maintaining a consistent strategic direction and translating priorities into coordinated action. Key strategic pillars included:
- Customer and Market Diversification: A strong focus on acquiring new customers and deepening relationships with existing clients led to higher volumes and expanded the revenue base.
- Product Diversification and Innovation: The company successfully broadened its portfolio beyond traditional teas, with the herbal infusion vertical gaining commercial traction. New tea flavours, cinnamon-based products, and tailored HORECA solutions were introduced. HVA Foods PLC’s product mix now includes premium, herbal, tea bag, Golden Ceylon, gift, and mixology collections, alongside ready-to-drink iced tea variants and superfoods like Moringa.
- Operational Excellence: Initiatives in cost rationalisation, procurement optimization, and efficient working capital management bolstered margins and cash flow. The continued implementation of SAP and automation of blending processes strengthened digital infrastructure and control.
- Global Reach: HVA Foods PLC’s flagship brand, HELADIV, now serves over 23 countries across the Middle East, CIS, Europe, North America, East Asia, Australia, Africa, and the domestic Sri Lankan market.
Navigating a Dynamic Operating Landscape
The reporting period saw a complex global economy, with 3.4% growth in 2025, but also challenges from geopolitical tensions, particularly the Middle East conflict, which impacted shipping and insurance costs. The Sri Lankan economy expanded by 5% in 2025, with lower interest rates providing some relief, although Rupee depreciation increased import costs. The domestic tea industry saw a marginal increase in production, with value-added products accounting for an 11-year high of 59% of tea exports, underscoring HVA Foods PLC’s strategic focus.
Commitment to Governance and Sustainability
The Board continued to strengthen governance processes, with particular attention to internal controls, working capital quality, and operational efficiency. Risk management was significantly enhanced with comprehensive, action-oriented risk registers. HVA Foods PLC is also advancing its sustainability journey, developing a roadmap for alignment with SLFRS S1 and S2 disclosures, focusing on employee value creation, product safety, and responsible sourcing through certifications like Rainforest Alliance.
Cautiously Optimistic Outlook
Looking ahead, HVA Foods PLC maintains cautious optimism, building on the strong turnaround. The company will continue to focus on market expansion, particularly pursuing opportunities in Japan and other Far Eastern markets to achieve greater geographical balance. Innovation in herbs, flavours, cinnamon, and ingredients will remain central, responding to evolving consumer preferences for ready-to-drink and wellness-focused beverages. The unwavering backing of the George Steuart Group continues to provide institutional strength and strategic access.
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