COLOMBO, Sri Lanka – August 31, 2026 – Tea Smallholder Factories PLC (TSFL) has unveiled its Annual Report for the financial year ended March 31, 2026, showcasing a period of significant operational resilience and robust financial growth amidst a dynamic and challenging economic landscape. The company reported a remarkable 19% increase in revenue and a sevenfold surge in Profit Before Tax (PBT), underscoring its strategic adaptability and strengthened market position.
Strong Financial Performance Signals New Chapter
The latest annual disclosures reveal a pivotal year for TSFL, marked by a change in management and a renewed focus on efficiency and value creation. The company reported total revenue from contracts with customers reaching Rs. 3.32 billion, a notable increase from Rs. 2.80 billion in the previous financial year. This growth was primarily fueled by a 25% surge in sales volume, which climbed to 2.65 million kilograms.
Despite a 5% decline in the Net Sales Average (NSA) per kilogram due to market pricing pressures, the substantial volume increase effectively offset this, leading to impressive overall revenue growth. A significant highlight is the dramatic turnaround in profitability, with Profit Before Tax (PBT) soaring to Rs. 236.35 million, a substantial improvement from Rs. 31.92 million in the prior year. Profit After Tax (PAT) also saw a significant boost, reaching Rs. 165.68 million compared to Rs. 21.59 million previously, translating to Earnings Per Share (EPS) of Rs. 5.52 from Rs. 0.72.
Key financial indicators from the report include:
- Revenue: Rs. 3.32 billion (19% increase year-on-year)
- Profit Before Tax (PBT): Rs. 236.35 million (sevenfold increase)
- Profit After Tax (PAT): Rs. 165.68 million
- Earnings Per Share (EPS): Rs. 5.52
- Production Volume: 2.71 million kg (23% increase)
- Factory Utilisation: Improved to 59% from 47%
- Cost of Production: Declined to Rs. 1,242.23 per kg
Operational Resilience Amidst Industry Headwinds
The financial year 2025/26 presented a challenging operating environment for the Sri Lankan tea industry, characterized by softer auction prices, volatile weather conditions, elevated production costs, labour-related cost pressures, and uncertainty across key export markets. Notably, the impact of Cyclone Ditwah in November 2025 also added significant headwinds.
Despite these complexities, TSFL maintained a sharp focus on operational resilience, factory utilisation, green leaf procurement, product quality, and disciplined cost management. The company produced 2.71 million kg of made tea, reflecting strong operational efficiency. Green leaf procurement from its vast smallholder supplier network amounted to 13.08 million kg, engaging approximately 8,463 smallholder partners. TSFL continued to achieve a premium of 3.64% over the national low-grown average price, a testament to its commitment to quality.
Strategic Investments and Future Outlook
TSFL strategically invested Rs. 71.2 million in capital expenditure during the year, primarily directed towards enhancing factory infrastructure and operational capabilities. Key investments included advanced colour sorters, rehabilitation of withering troughs and dryers, and the installation of automated humidification systems. These upgrades are aimed at improving product uniformity, increasing sorting capacity, reducing manual intervention, and ultimately achieving better price realization for its teas.
Looking ahead, TSFL is poised to lead change through product diversification, operational excellence, and sustainable growth. The company plans to continue strengthening its smallholder partnerships, embracing innovation, and upholding responsible stewardship across its value chain. Continued investment in new machinery and technology is a key priority to enhance quality, increase productivity, and optimize costs in areas such as labour and energy consumption.
Governance, Leadership, and Sustainability at the Forefront
A significant development during the year was the change in management, with Udapussellawa Plantations PLC acquiring a controlling interest, raising its equity stake to 75.27% as at March 31, 2026. This transition led to a reconstitution of the Board of Directors, bringing new perspectives and renewed energy to the company’s strategic direction. Dr. P. S. H. Uluwaduge, Chairman of TSFL, acknowledged the contributions of previous board members and welcomed the new directors, whose experience, particularly in the plantation sector, is expected to be invaluable.
TSFL remains deeply committed to the highest standards of corporate governance, transparency, and sustainability. The company integrates Global Reporting Initiative (GRI) Standards and ISO certifications (ISO 22000:2018 for Food Safety and ISO 45001:2018 for Occupational Health and Safety) into its reporting and operations. Environmental stewardship efforts include rainwater harvesting, plastic recycling programmes across five factories, and the maintenance of over 1,650 trees planted in previous initiatives.
Community engagement is a core aspect of TSFL’s commitment, with initiatives supporting local employment, infrastructure (such as road repair benefiting approximately 5,000 villagers), health camps, and disaster relief efforts, particularly in the aftermath of Cyclone Ditwah. The company also offers extensive extension services and financial assistance to its smallholder partners, fostering sustainable agricultural practices and improving livelihoods.
With a robust financial performance, strategic investments in operational excellence, a strong governance framework, and unwavering commitment to its stakeholders and the environment, Tea Smallholder Factories PLC is well-positioned for sustained growth and value creation in the evolving Sri Lankan tea industry.
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