The world’s largest tea planter McLeod Russel India Ltd reported a 2 per cent drop in standalone net profit at Rs 216.48 crore in the second quarter to September 30 this fiscal against Rs 221.50 crore recorded in the corresponding quarter last fiscal.

Operating profit before depreciation for the quarter was lower by 5 per cent at Rs 239 crore as against Rs 251 crore last year. “This is mainly attributable to loss of crop during the quarter and higher wage cost. Wage cost has increased by Rs 20 crore during the quarter as compared to the same quarter last year. Consumption of raw materials is lower by Rs 15 crore due to decrease in volume of green leaf from small growers,” the company said in a release.

The company’s tea production in India was lower at 705 million kg (mkg) against 717 mkg last year for the period January to August. Tea production suffered from June to August due to weather conditions and pest problems.

McLeod Russel’s tea production in the African region was lower by 45 mkg up to September.

Crop loss of 45 mkg in Kenya had a positive impact on prices in the Mombasa auction. Tea prices at the Mombasa auction up to September were higher by 25 per cent as compared to the same period in the last year.

However, to date prices in India are lower by Rs 6 per kg as compared to last year. Tea Prices for the company were lower by Re 4 per kg for the quarter compared to last year.

“Tea prices have started moving higher from September and are currently higher by Rs 7 per kg as compared to the similar week last year. The sales quantity for the quarter is higher by 16 lakh kg on strong demand.

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