The Hindu Business Line : McLeod Russel posts lower net, higher turnover

Kolkata, June 2 In 2007-08, McLeod Russel India Ltd, the largest producer of tea, posted a marginally lower net profit of Rs 47.21 crore (Rs 47.47 crore in 2006-07) on a higher turnover of Rs 655.49 crore (Rs 606.61 crore). The operating profit amounted to Rs 83.33 crore (Rs 88.12 crore).

“While the average cost of production increased by Rs 2.50 a kg, the selling price was up by a meagre Re 1 a kg during the year,” Mr Deepak Khaitan, Vice-Chairman of the company, told newspersons here on Monday.

In the first half, the company suffered a loss of about Rs 25 crore on a production of 50 million kgs but the average Rs 8 a kg increase in the selling price in the second half covered the first half loss to a large extent, Mr Khaitan observed. There was a production loss of about 1 million kgs this March due to unfavourable weather condition which also impacted the profit.

In the fourth quarter, the loss amounted to Rs 97.34 crore as compared to Rs 75.43 crore in the same period of last year. This was because, as he explained, there being no production and sale of tea in the fourth quarter, no tea company in North India would earn profit during the period. For McLeod Russel, the loss was more because of the merger of Moran Tea.

The Board of Directors has recommended 20 per cent dividend (Re 1 a share) for the period under review, the same as the previous year.

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During the year under review, production was 74.4 million kgs (70.1 million kgs), registering an increase of 43 lakh kgs, while sales were 75.1 million kgs (70.2 million kgs), showing a growth of 49 lakh kgs.