Tata Coffee back in black with Rs 32.4 crore profit in Q2

Firm had net loss of Rs 12.9 crore in the corresponding quarter last year

Tata Coffee Limited today reported a consolidated net profit of Rs 32.4 crore for the second quarter ended September 30, 2014 as against a net loss of Rs 12.9 crore in the corresponding quarter last year. The profit is arrive at after paying minority interest.

The total income during the second quarter, however, declined 6.4 per cent to Rs 440 crore. Operating profit for the quarter increased 5 per cent to Rs 78.4 crore from Rs 75 crore in the year ago quarter.

The primary reason for the growth in profits was better performance shown by its US operating subsidiary, Eight O'Clock Coffee. The subsidiary showed an upswing in market shares versus competition.

In particular, the brand continued to strengthen its presence in the growing single serve segment. However, the bagged coffee segment continued to remain under pressure, resulting in the total income for the quarter standing at $43.835 million as against $47.117 million.

The sales and profit performance of the plantation business in India during the quarter and half year was impacted by lower production of coffee and pepper during the previous financial year 2013-14, which was an off-year in the biennial production cycle of both these crops.

However, the standing crops of both coffee and pepper for harvest in the year ahead, which is scheduled to commence post December 2014, appears to be promising, the company said in a statement.

The instant coffee business of the company reported relatively good topline sales and volume growth, with revenues standing at Rs 94 crore for the quarter compared to Rs 84 crore in the year ago quarter, a growth of 12 per cent. The volume growth was 29 per cent during the quarter.

"The company's focus on value-addition and superior offerings continues to remain a key driver of our strategy. Our premium value propositions provide us good insulation from commodity price volatilities. The recent sharp increase in coffee terminals will also have a positive impact," Tata Coffee managing director Hameed Huq said.