Tata Global Beverages Q1 net down 6.5% at Rs 133.60 cr

Tata Global Beverages, which sells tea brands like Tata Tea and Tetley, today posted 6.55 per cent decline in consolidated net profit at Rs 133.60 crore in the June quarter, on the back of certain exceptional items including some restructuring cost.

The company had reported a net profit of Rs 142.97 crore in the year-ago period, it said in a release.

"Profit after tax is lower because of exceptional items. In the previous we had profit from our exit in the China venture. In the current year we have restructuring and redundancy cost," Tata Global Beverages chief financial officer L Krishnakumar told PTI.

"We have changed the organisation structure and moved more activities to India, in terms of back office and technology related work. It is a one-time cost which would spread over the next one year; so that is creating an adverse impact on PAT line," he added.

The company has shown a loss of Rs 18.18 crore in exceptional items during the reporting quarter.

Its total income rose to Rs 1,831.11 crore, compared with Rs 1,718.76 crore in the year-ago period.

The firm's sales growth stood at 6 per cent in the quarter, according to Krishnakumar.

"Tata Coffee turnover was lower, which is affecting the growth rate, but notwithstanding that the sales growth has been much higher than what we have achieved in the recent past," he said, adding, "We are seeing an improving trend in sale and expect its growth to be better going forward."
The revenue from branded business increased by 7 per cent year-on-year in the reporting quarter, and after excluding the impact of business restructuring and at constant currency, the increase is 8 per cent, Krishnakumar said, adding, "However, non-branded sales were lower than the corresponding quarter of previous year."
On the capex for FY19, Krishnakumar said, "In terms of normal capex, we spend around Rs 140-150 crore a year on a consolidated basis for all markets. So, we expect to be in that line."
Asked if the company would be looking to merge with the salt and lentils business of Tata Chemicals, while also entering the dairy business, as per media reports, he said, "Any restructuring is speculation at this point in time."
On the exit from China, Russia and Sri Lanka he said, "It has helped to improve profitability but has had an impact on the topline till we catch up the turnover through other growth measure."