MT/LT prospects for RWSL : RECORD SALT HARVEST to drive earningsRaigam Wayamba Salterns PlcCSELK:RWSL.N0000HR2302Previous Discussions A. Short term TA outlook (8th Oct. 2025) B. Longterm outlook (17th April 2024) RWSL gave a 4X return since 17th April 2024 discussion. Revisit of 2024 Bull Thesis The original 2024 bull thesis was anchored on expectations of dry weather following several years of adverse conditions in Sri Lanka’s salt-producing regions. The assumption was that a bumper harvest would boost topline and gross profit (GP) margins for RWSL, the largest private salt producer in the country. However, this thesis did not materialize. Sri Lanka experienced another unexpectedly wet year, leading to a complete inventory dry-out by March 2025—especially among state-owned salt companies. Unexpected Upside: Import-Led EPS Surge This scarcity created a strategic opening for RWSL, which became the preferred salt importer for the government. Key drivers of performance: • Salt prices surged due to scarcity and a newly imposed LKR 60.00 import levy. • Despite lower GP margins on imported salt, higher prices and volumes drove a 5X EPS increase • LKR 0.14 in Dec 2024 • LKR 0.79 in March 2025 • LKR 0.76 in June 2025 RWSL shares rallied 4X in response to this earnings momentum. • As per June 2025 financials, RWSL’s imported salt inventory will last through September/October 2025. • EPS is expected to remain in line with March and June 2025 levels for the Sep. 2025 quarter. Weather Shift: Record Harvest in Puttalam The dry weather anticipated in the original 2024 thesis has finally arrived. Salt producers expect the 2025 Maha season harvest in Puttalam to exceed 100,000 MT— the highest in five years. Earnings Implications • Locally produced salt avoids the LKR 60.00 import levy and other import-related costs. • With no public pressure to reduce retail prices, prices are expected to remain elevated. • Once imported inventory is exhausted, RWSL’s GP margins will expand significantly, driving higher profitability and providing strong tailwinds for share price appreciation. Strategic Opportunities Note: The below strategic outlook is speculative and based solely on the author’s analysis. There is no known insider information or confirmation regarding PPP or acquisition discussions involving RWSL. 1. State Sector Privatization / PPP Opportunities • Sri Lanka is moving toward liberalizing state enterprises, regardless of political party in power as happened in India post 1991. • The government has already signaled interest in PPPs (e.g., Sevenagala Sugar Industries). • State salt companies may follow suit. RWSL’s strategic position: • Largest private salt producer in the country • Only domestic producer capable of PVD salt (high-grade industrial salt) • Debt-free, with expected LKR 2 billion+ free cash by end of FY 2025 • Holds 10–15% market share, while state firms control about 75% • Successful PPP participation could multiply RWSL’s scale significantly 2. Acquisition Target Potential • RWSL is passively managed, with a self-described “risk-averse” approach. • Historically, the company has not pursued aggressive expansion or meaningful diversification. • However, recent performance and assets make it attractive: 3X topline growth Strong GP margins Potential PPP opportunities 500+ acres of land, much of it near existing wind power infrastructure • RWSL may come under the radar for a strategic acquisition by a more ambitious growth-oriented investor