Tata Tea quarterly net profit declines 80%

Tata Tea today reported 80 per cent decline in net profits to Rs 3.89 crore for the quarter ended March 31, 2007 compared with Rs 19.32 crore in the corresponding quarter last year. Percy Siganporia, MD, said the profit decline was because the dividend flow from the subsidiary, Tata Tea GB had stopped in the quarter as it was repaying the debt incurred on the Glaceau acquisition.

"Tata Tea will be able to clear off the debt over the next couple of quarters," said L K Krishnakumar, CFO, Tata Tea. The company's income from operations in the quarter was up 14.68 per cent at Rs 251.23 crore (Rs 219.07 crore).

Tata Tea posted a net profit of Rs 306.57 crore in FY07 compared with Rs 186.93 crore in the preceding financial year. The income from operations increased by 9 per cent to Rs 1070.35 crore, while the same was Rs 982.05 crore in FY06.

The group's consolidated income for the financial year, including that of subsidiaries such as Tata Tea GB, was Rs 4044.55 crore, an increase of 29 per cent over the last financial year. The increase in income was primarily driven by the acquisitions of Jemca and Eight O Clock Coffee, which led to an increase in branded tea sales. The company also posted a consolidated net profit of Rs 443.35 crore for the year ended March 31, 2007, a 48 per cent increase compared with Rs 299.15 crore in FY06.

According to a company release, the previous year's figures have been regrouped to conform to the current numbers. These numbers are not strictly comparable due to business acquisitions in the current year. The board of directors has also recommended a dividend of Rs 15 a equity share of Rs 10 each for FY07.