Tata Global Beverages (TGBL) today reported a decline of 94.37 per cent in consolidated net profit to Rs 3.90 crore for the quarter ended March 31, 2015, on account of impairment of its businesses in China and Eastern Europe.
It had posted a net profit of Rs 69.30 crore in the January-March period of 2013-14 fiscal, the company said in a filing to the BSE.
TGBL's net sales on consolidated basis during the quarter under review were at Rs 1,874.58 crore, marginally up 0.47 per cent, as against Rs 1,865.69 crore of the same period of last fiscal.
The company has shown a loss of Rs 102.52 crore in exceptional items for the fourth quarter of FY 2014-15.
"During the quarter, the holding company recognised a non-cash impairment loss under exceptional items relating to its businesses in China and Eastern Europe," the company said.
The impairment relating to the China business is on account of delays in start-up and stabilisation of technology for an enhanced product range.
In the case of Eastern Europe, the goodwill impairment mainly relates to Russia and to a lesser extent to Eastern European branded business.
"In Russia, the impairment is arising due to adverse macroeconomic environment with resultant adverse impact on interest and discounting rates used for impairment assessment," TGBL added.
Commenting on the performance, TGBL CFO L Krishna Kumar said: "Over a period of time if the performance improves, then some of them could be reversed."
Otherwise, he said: "Our Indian business has done good ... Our US business recorded 20 per cent growth and Tetley has also done good in UK, so also Tata Coffee which was low last year."
He further said profitability of the brands of the group was also good during the period.
"The company is investing in some start-ups for the future of the company. Starbucks has now expanded which has now 72 stores and had a 15 per cent volume growth. We would have to scale it up," Kumar said.
For the fiscal 2014-15, TGBL's reported a decline of 48.42 per cent in its consolidated net profit to Rs 247.82 crore as against net profit of Rs 480.51 crore in the previous fiscal.
Net sales during fiscal 2014-15 were up 2.76 per cent at Rs 7,832.67 crore as against Rs 7,621.98 crore a year ago.
Meanwhile, in a separate filing TGBL has informed that its board has recommended a dividend of Rs 2.25 per equity share of Re 1 each, in respect of the financial year 2014-15.
TGBL's shares were trading at Rs 144.70 on BSE during afternoon trade, down 2.72 per cent on the BSE.
