Tata Tea net dips 3.5%
CORPORATE SCORECARD
| The decline in net profit has been attributed to "the impact of interest on loans taken for acquisition and higher effective tax rate". Interest on loans for acquisition amounted to Rs 10.89 crore including those on bridge loans to finance acquisition of 25 per cent stake in Energy Brand Inc in 2006-07 by the Tetley Group, a subsidiary of Tata Tea, said Tata Tea Chairman Ratan Tata. |
| In August 2006, Tata Tea had acquired 30 per cent stake in the US beverage maker Glaceau for $677 million, a stake it later sold to beverages giant Coca-Cola in May this year for $1.1 billion. However, the debt raised to buy the holding will be repaid later in the financial year ending March 31, 2008. |
| The results were also impacted to an extent of Rs 35-40 crore because of the impact of rupee appreciation on sales of Tetley and Eight O Clock Coffee in overseas markets. |
| Staff costs also went up by eight per cent to Rs 48 crore in the quarter under review compared with Rs 44.35 crore in corresponding quarter in the last financial year. Although material cost decreased by nine per cent to Rs 76.81 crore (Rs 84.51 crore), other expenditures increased by eight per cent to Rs 87.29 crore (Rs 80.91 crore). |
| Operating profit margins went down by 48 basis points. Its consolidated net profit declined 43 per cent to Rs 45.68 crore in the first quarter (Rs 80.07 crore). Its net profit fell below analysts' expectations, although they had predicted a decline. |
| Its consolidated total income, however, grew 28 per cent to Rs 1,028.79 crore (Rs 806.37 crore). |
| This marginally exceeded analysts' expectations of 27.7 per cent. |
| Earnings per share declined 11 per cent to Rs 7.06 (Rs 7.93). |