The Hindu Business Line : Tata Coffee Q3 sales down 2.4 pc

SLUGGISH sales of instant coffee impacted Tata Coffee's earnings for the third quarter ended December 2005 compared to the corresponding quarter last year.

Net sales for Q3 FY06 were down by 2.4 per cent to Rs 49 crore as against Rs 50.2 crore in Q3 FY05. Profit after tax (PAT) for the quarter stood at Rs 5.57 crore, a growth of 13 per cent over Rs 4.93 crore in Q3 FY05.

However, net profits after extraordinary items were down by almost 64 per cent at Rs 4.8 crore during Q3 FY06 as against Rs 13.32 crore in Q3 FY05, which included a profit of Rs 8.38 crore from sale of investments and properties.

The Tata Coffee Managing Director, Mr M.H. Ashraff, attributed the decline in sales to the drop in instant coffee sales. However, he expected the company to make up for the shortfall during the fourth quarter, a traditionally strong period for coffee sales.

"With winter season in Russia, we expect sales to pick up during the current quarter," Mr Ashraff said adding the company had sizeable orders in hand.

The uptick in PAT during Q3 was largely due to the better performance of our plantation business, Mr Ashraff said. The plantation operations recorded substantial improvement in profitability as coffee prices improved during the quarter.

After receiving the necessary approvals, Tata Coffee transferred the six estates belonging to Tata Tea with effect from December 31, 2005. Tata Coffee shares ended marginally lower on Monday at Rs 354 on the BSE over the previous close.