The Hindu Business Line : Tata Tea posts Rs 91.53-cr PAT

TATA Tea Ltd (TTL) today reported a profit after tax of Rs 91.53 crore for the year ended March 31, 2004 as against the previous corresponding Rs 70.60 crore. Income from operations was Rs 782.68 crore (Rs 755.60 crore for the year ago period).

The company's board has recommended a dividend of Rs 8.50 per share of Rs 10 each aggregating to Rs 53.91 crore including dividend tax (Rs 44.39 crore at 70 per cent, including dividend tax).

The better performance was attributed to improvement in TTL's branded sales and gains from treasury operations. However, the losses from its plantation business worsened last year.

In FY04, 9-10 new geographies and 50 new products were added by TTL and its 98.58 per cent subsidiary, Tetley. Half of the global branded tea market is composed of items such as specialty teas, green tea and fruit/herbal teas. Tetley has forayed into some of these segments.

At the consolidated level, the TTL-Tetley combine reported a profit after tax of Rs 210.46 crore (Rs 116.28 crore) on total income of Rs 3,110.76 crore (Rs 2,967.74 crore). As much as 86 per cent of consolidated revenues now comes from branded sales.

The board ratified Mr Percy Siganporia's appointment as TTL's Managing Director, effective July 1. Ms Sangeetha Talwar is Director (Marketing) of TTL.

At a press briefing, officials pointed out that the four per cent volume growth achieved by TTL was amidst a larger 5.3 per cent volume dip in the Indian packaged tea market. Though happy with the profit growth, they conceded the single digit rise in turnover was not in the same league.

TTL's total debt has fallen to Rs 197 crore (Rs 238 crore), while that of Tetley has dipped from the near 210 million pounds at time of acquisition by Tatas, to 145 million pounds. Given its tiered composition, the Tetley debt is seen as capable of further cost reduction through refinancing.

Tetley officials declined to cite a comfortable level of debt for the company as it is looking at both organic and inorganic growth opportunities.

On the commodity side, Mr Siganporia said, tea prices had slowly firmed up in the domestic market from March 2003 to June 2004. With the North East's contribution now in full swing, there is the likelihood of prices beginning to soften. On the other hand, the situation then becomes attractive for tea outsourcing.

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