‘Indian tea prices this year will be higher than last year
Tata Global Beverages (TGB) reported a drop of 36 per cent in its consolidated net profit for the fourth quarter of 2011-12 at Rs.54.21 crore (Rs.85.24 crore). Net sales rose 11 per cent to Rs.1,724.11 crore (Rs.1,558.01 crore). The operating profit was higher at Rs.161.93 crore (Rs.131.91 crore).
The company said the drop in profit was due to an exceptional item in the fourth quarter of 2010-11 on account of profit on sale of shares.
“In fact, profit before exceptional items is higher at Rs.166.6 crore (Rs.121 crore),” said L. Krishna Kumar, CFO, while addressing a press conference here on Wednesday.
The company's board has recommended a dividend of Rs.2.15 per share of Re.1 each for 2011-12.
For the whole of 2011-12, TGB posted a 48 per cent higher consolidated net profit of Rs.356.14 crore, largely on improved operating performance and a 10 per cent growth in net sales at Rs.6,585.26 crore.
Mr. Kumar said TGB benefited from the currency exchange movement, “which had a favourable impact of about 3 per cent out of the 10 per cent sales growth given that two-thirds of our business is from outside India.”
Profit before exceptional income rose by 14 per cent to Rs.551 crore on lower interest costs and benefits of financial restructuring, Percy Siganporia, Managing Director, told reporters.
On a standalone basis, the company reported a 68 per cent higher net profit of Rs.303 crore on 12 per cent higher total operating income of Rs.2,035 crore in 2011-12.
Mr. Siganporia said the major drivers of the company's consolidated performance during the year were “India's strong performance and the portfolio growth here. We increased our value share and volume share to 21.3 per cent and 19.6 per cent, respectively and entered eight states during the year. We also undertook an intense cost intervention exercise across the businesses outside India and those benefits will be visible in the current fiscal.”
In the current year, the MD expected a sharpening of tea prices in Africa and India by the year-end and an easing thereafter. “But Indian tea prices this year will be higher than last year,” Mr. Siganporia said.