McLeod Russel has reported higher standalone net profit at Rs 128.66 crore in the third quarter against Rs 123.15 crore in the corresponding quarter last year.

Two of its overseas subsidiaries, however, made lower EBITDA during the October-December quarter, the company said. Improvement in weather condition during the quarter in Africa caused higher production and lowered tea prices by around 20 per cent.

McLeod Russel Uganda’s EBIDTA shrunk by $2 million, while that of Gisovu Tea Co of Rwanda’s EBIDTA was down $1 million. Vietnamese subsidiary Phu Ben EBITDA improved by $0.46 million.

The African tea prices could not influence the Indian prices much. McLeod’s average price at Rs 173 a kg was down 2.97 per cent on strong local demand and lower inventory. Of the sales volume of 26.8 mkg, it exported 18.3 mkg at Rs 200 a kg against 18.5 mkg at Rs 194 a kg.

African price trend Nevertheless, return of the dry spell in Africa this month has been seeing smart price recovery in the past few weeks.

“It has completely wiped out the price losses of the Q3,” said Kamal Baheti, whole-time director and CFO, McLeod Russel. The company said that if the current weather conditions do not improve, there is likelihood of a crop loss in Africa.

New domestic tea season starting in March is likely to have a “positive impact” on the current African price trend, the company said.

The company’s tea production in India has been higher by 5.5 million kg (mkg) from own plantation leaf. Bought leaf figure also increased by 4 mkg.

The production in Assam (till November against that in last year) is estimated at 29 mkg.

jayanta.mallick@thehindu.co.in

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