Mumbai: Tata Global Beverages, the world’s second largest manufacturer and distributor of tea, posted a 10% drop in Dec. quarter net profit hurt by losses in US coffee operations and a one-time loss.
The company, which is part of the diversified Tata Group, owns brands such as Tata Tea in the Indian market along with global brands such as Tetley Tea in UK, Eight o’ Clock Coffee in US and speciality tea business under Good Earth.
Its consolidated net profit fell to Rs 64.06 crores from Rs 71.93 crores a year-ago. Net sales grew 12% to Rs 1790 crore from the same period a year earlier.
Tata Global, which has a market cap of $1.15 billion, was forecast to report a net profit of Rs 9.98 crores on revenue of Rs 1780 crore, according to Thomson Reuters I/B/E/S.
“Coffee prices are a big challenge. The US coffee operations have been impacted by high trade spends to gather higher volumes,” Percy Siganporia, managing director told reporters on Wednesday.
The company posted an exceptional loss of Rs 16.03 crore which included costs incurred on employee separation schemes and long-term initiatives.
Commodity costs during the quarter climbed 13 percent to Rs 698 crores.
“Even tea prices continue to remain high in most markets except in India where there is some relief,” L Krishnakumar, chief financial officer said.
The company buys teas largely from India, Kenya, Sri Lanka amongst others.
Tata Global’s profit after interest but before exceptional items rose 6% to Rs 157 crores due to improved operating performance and lower interest costs, which partially offset the impact of high raw materials.
Interest costs for the quarter fell to Rs 3.92 crores from Rs 15.21 crores in the same period a year ago.