Coffee Day Q2 loss narrows to Rs 9.3 crore

Year-ago loss was four times as much at Rs 39.8 crore

Coffee Day Enterprises Ltd said second quarter losses reduced to Rs 9.3 crore, three fourth's lower than Rs 39.8 crore losses it reported a year ago. The reduced losses are due to improved margins in its coffee business.

Revenue grew 15.3 per cent to RS 665.8 crore in the period to July to September as business from its financial services unit improved in its first results for Coffee Day after it listed on the stock exchanges.

Coffee Day had posted Rs 39.8 crore losses on revenue of Rs 577.2 crore in the second quarter of last year.

Coffee Day debuted poorly on November 2 on the stock exchanges closing 18 per cent lower at Rs 270 than its listed price of Rs 313. The stock closed at Rs 272.30, up Rs 1.5 or 0.55 per cent on Monday ahead of the results.

"We believe that our significant measure of success will be the shareholder value we create over the long term. Our confidence to grow this value comes from our proven ability and experience in growing strong home-grown brands, achieving a sizeable market presence and a proven legacy," said V G Siddhartha, chairman and managing of Coffee Day Enterprises in a statement to the stock exchanges. "We continue to commit ourselves to ambitious targets. We continue to grow the retail coffee business at double-digits over the next couple of years."

Margins, calculated as sales minus expenses before taxes, improved by 540 basis points to 20.2 per cent compared to a year before, the firm said.

Coffee business remained flat during the quarter at Rs 285 crore compared to second quarter last year, while reducing by 16 per cent in the period between April and June 2015. Financial services business tripled to Rs 123.5 crore as against 48.6 crore in the corresponding period last year.

Coffee exports during the quarter dipped nearly 78 per cent due to drop in global prices for the bean. However, Coffee Day saw retail business in selling coffee in its premium cafes growing by 3.6 per cnt.

Coffee Day said the margins in coffee business improved by 4.4 per cent on increase in retail outlets and vending machines at offices across the country. (EoM)