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Tata Coffee reports robust growth in revenues and profits

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Tata Coffee Limited has announced its results for the fourth quarter and full year ended March 31, 2015. The Company reported an increase of 13% in its Consolidated Total Income from operations for the quarter compared to previous year, driven by improved performance of both value added Coffee and Plantation businesses.
The Company for the current Quarter has registered an increase of 93% in its Consolidated Operating Profits. The Company has also recorded a substantial increase of 187% in its Consolidated Profit before Tax and 142% increase in its Group Consolidated Net Profit post minority interest for the Quarter.

For the quarter, the Group Consolidated Net Profit, post minority interest and share of profit from associates stood at Rs. 39 crores (US$6.144 million) compared to Rs.16 crores for the corresponding quarter of previous year.

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Tata Coffee for the twelve months ended 31st March 2015 has also reported a 10% increase in the Consolidated Operating Profits, 95% increase in its Consolidated Profit before Tax and 48% increase in its Group Consolidated Net Profit post minority interest for the twelve months ended 31st March 2015.

The Company has declared Dividend payment of Rs.1.30 per share (face value of Rs.1/- each)

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For the year ended March 2015, the Group Consolidated Net Profit post minority interest, stood at Rs. 120 Crores (US$18.839 million), compared to a profit of Rs. 81 Crores during the same period last year.

Consolidated results:

Quarter ended March 2015

  • Total Income for the quarter at Rs. 450 crores (US$70.648 million) Vs 397 crores, an increase of 13%
  • Profit from Operations for the quarter at Rs. 86 Crores (US$13.5 million) Vs Rs. 45 Crores, an increase of 93%.
  • Profit before Tax at Rs. 84 crores (US$13.18 million) Vs 29 crores, an increase of 187%.
  • Group Consolidated Net Profit at Rs. 39 crores (US$6.122 million) Vs 16 crores, an increase of 142%

Year ended March 2015

  • Total Income for the year at Rs. 1691 crores (US$265.48 million) Vs 1677 crores.
  • Profit from Operations for the year at Rs. 290 Crores (US$45.5 million) Vs Rs. 264 Crores, an increase of 10%.
  • Profit before Tax at Rs. 266 (US$41.76 million)crores Vs 136 crores, an increase of 95%-One time impact of Exceptional item in previous year.
  • Group Consolidated Net Profit at Rs. 120 crores (US$18.839 million) Vs 81 crores, an increase of 48%

Commentary on Financial Results for Q4

The primary reason for the above growth in profits was superior performance in the Coffee Plantation business and in Value added products driven by the results of the Company’s US operating subsidiary, Eight O’Clock Coffee.

The Eight O’ Clock brand continues to gain momentum and the bagged coffee segment has shown improvement in its volumes during the quarter, compared to the corresponding quarter of previous year.

In particular, the brand continued to strengthen its presence in the growing single serve segment.

The total Income for the quarter, for Eight O’ Clock Coffee, stood at USD 40 million compared to USD 36 million for the corresponding quarter of the previous year.

The sales and profit performance of the plantation business in India during the current quarter is significantly higher compared to corresponding quarter of the previous year, but are lower for the full year on account of lower crop of coffee and pepper that were available for sale in the preceding quarters.

However, the current season’s total production of Coffee and Pepper is higher compared to Previous Year.

The instant coffee/value added business of the Company reported good topline sales and volume growth for the full year, with revenues standing at Rs. 386 Crores (US$60.6 million), compared to Rs. 359 Crores for the previous year, an increase of 8%.

This growth in sales was driven primarily by higher sales of instant coffee to new geographies, including new varieties of instant coffee developed by the Company.

Sustainability

Tata Coffee is committed to the use of sustainable practices in various areas of plantations, including irrigation and water management.

This focus has also now extended to the instant coffee operations, including significant use of wind power at the Theni manufacturing unit.

Commenting on the Company’s performance, Mr. Sanjiv Sarin, Managing Director, Tata Coffee Limited, said – “The Company’s focus on value-addition and superior offerings continues to remain a key driver of our strategy.

This, as well as the continued growth in sales of instant coffee, augurs well for the future. Our premium value propositions provide us good insulation from commodity price volatilities.”

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