The Hindu Business Line : Tata Tea consolidated net up 75% in Q1

Mumbai July 28 Tata Tea reported a 75 per cent increase in its consolidated net profit for the quarter ended June 30, 2008 at Rs 85.39 crore versus Rs 48.93 crore in the same period last year, mainly driven by lower interest costs and strong brand performance across all key markets.

However, its operating profit has been impacted by increases in commodity prices and other input costs, apart from higher level of advertisement expenditure during the quarter. Its consolidate advertisement and related spends were at Rs 235.42 crore (Rs 213.59 crore). Its consumption of raw material increased to Rs 344.13 crore (Rs 298.10 crore)

On a standalone basis, the company’s net profit at Rs 37.71 crore is lower than the same period last year (Rs 41.23 crore) due to exceptional income in the previous year and higher effective tax rate in the current year. Tata Tea’s consolidated world wide income from operations at Rs 1,134.69 crore (Rs 1,010.74 crore) was up by nearly 12 per cent.

During the quarter, Tata Coffee Ltd, a 57.48 per cent subsidiary of the holding company, acquired 3,000 shares of $1 each of Kahutara Holdings, Cyprus, which became a wholly owned subsidiary of Tata Coffee with effect from May 27, 2008.

Mr L. Krishna Kumar, the group Chief Financial Officer, said the current year would be difficult year. “We have to look at prices and see if we can take further price increases,” he said.

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