Colombo, 31 August 2026 – Hapugastenne Plantations PLC (HPL) has released its Annual Report for the financial year ended 31st March 2026, revealing a demanding period marked by macroeconomic headwinds and sector-specific challenges. Despite a dip in revenue and profitability, the company demonstrated resilience through continued strategic investments in long-term sustainability and operational efficiency.
Financial Performance Reflects Market Pressures
The report highlights a challenging year for HPL, with group revenue declining by 9.69% to LKR 4,485 million from LKR 4,966 million in the previous financial year. This downturn significantly impacted profitability, with Profit Before Interest and Tax (PBIT) falling by 59.60% to LKR 360 million, and Profit After Tax (PAT) experiencing a 40.76% reduction to LKR 201 million. Consequently, Earnings Per Share (EPS) stood at LKR 4.32, a decrease from LKR 7.29 in the prior year.
Despite these declines, certain financial indicators showed positive movement:
- Total assets increased by 3.28% to LKR 10.27 billion, driven partly by fair value gains on biological assets and field development investments.
- Net assets per share improved by 3.48% to LKR 91.83.
- The market price of HPL shares saw a notable 21.38% increase to LKR 54.50, reflecting investor confidence despite the challenging year.
Navigating a Complex Operating Environment
The year 2025/26 presented a confluence of internal and external pressures. Sri Lanka’s broader economy showed resilience with an estimated real GDP growth of 5.0%, and debt restructuring nearing completion. However, the plantation sector faced distinct hurdles.
The Chairman’s message detailed the significant impact of Cyclone Ditwah, which struck in November 2025, causing catastrophic damage across Sri Lanka, particularly in high and mid-grown plantation regions. This event severely disrupted production in the final quarter. Furthermore, the industry grappled with continued rising input costs, persistent labour shortages, and upward revisions in the national minimum daily wage for estate workers to LKR 1,750 from January 2026, adding substantial pressure on production costs.
Operationally, both the tea and rubber segments experienced setbacks:
- Tea Production: Total tea sales volume decreased by approximately 12% to 3.11 million kg. While the Net Sales Average (NSA) per kg held relatively steady at LKR 1,081.35, lower crop volumes affected overall performance.
- Rubber Production: Total rubber crop declined by 10% to 760,052 kg, with latex and scrap rubber production also falling. Softening rubber prices further impacted earnings.
Strategic Investments and Sustainability Focus Continue
Despite the difficult conditions, HPL maintained its commitment to long-term growth and sustainability. Total capital expenditure for the year remained substantial at LKR 259 million, only a marginal decrease from the previous year’s LKR 260 million. Key investments included:
- The renovated Rubber Factory at Galaboda Estate, a LKR 21 million investment, commenced operations, aiming to improve processing efficiency.
- Successful completion and grid connection of solar power projects at Hapugastenne Tea, Galaboda, Alupola, and Shawlands Estates, with more projects nearing completion. These initiatives underscore HPL’s focus on renewable energy and reducing its environmental footprint.
- Establishment of dedicated ground reservoirs for rainwater harvesting across several estates, enhancing water security and climate resilience.
The company also reinforced its commitment to community welfare, actively supporting affected estate and surrounding communities following Cyclone Ditwah.
Strengthening Governance and Leadership
The Annual Report also detailed changes in the company’s leadership. Mr. G.D.V. Perera was appointed Chief Executive Officer with effect from 2 April 2026, following the resignation of Mr. D.J. Ratwatte. Additionally, Mr. N. Nanayakkara was appointed as an Executive Director and Mr. K. Sivanesan as an Independent Non-Executive Director.
HPL continues to uphold strong corporate governance practices, aligning with the Colombo Stock Exchange (CSE) Listing Rules and the Code of Best Practice on Corporate Governance. While the company acknowledges its non-compliance with the Minimum Public Holding requirement, it is actively exploring options to rectify this.
Chairman Dr. P. S. H. Uluwaduge expressed cautious optimism for the future, stating, “Our continued investment in renewable energy, factory modernisation and productivity-enhancing initiatives during a difficult year reflects our confidence in the fundamentals of our business and our determination to position HPL for a stronger recovery as market conditions improve.”
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