Mcleod Russel

In Q4FY12, the company had posted a net loss of Rs.157 crore and this Q4Fy13, the net loss is at Rs.147 crore though, it posted a net profit of Rs.123 crore for Q3FY13. And for FY13, the company posted a 5% decline in consolidated net profit at Rs.274 crore. Lower sales have impacted the numbers. For FY13, its crop was down by 9 lakh kgs and sales was down by 7 lakh kgs.  But realizations on a standalone were better, higher by Rs.21.66/kg.  Exports also came in lower due to lower production and lower demand of orthodox tea from Iran, one of its big markets.  Despite better prices,  EBIDTA came in lower due to loss of production in India and Uganda plus higher operating costs – loss of own crop, increase in wages, cost of power and fuel and revision of staff salary. Costs per kg were higher by Rs.22 negating the higher price relisation of Rs.21/kg.

The company is the world’s biggest tea grower and talking out the future ahead, it has stated that unlike last year, this year weather conditions for all its black tea producing countries – Uganada, Rwanda, Vietnam and India. Tea production is estimated to be higher by 45 million kgs. Production in India is expected to recover to 2011 levels and tea prices, currently ruling Rs.5 to Rs.10 per kg lower is expected to show an increase in current 2013. The company is setting up a  trading outfit in Kenya to procure and supply African tea to the company’s Dubai blending unit.