Results for Quarter ended June 2016
Tata Global Beverages announces steady growth in revenues and an increase in Group Net Profits for the quarter ended June 2016
Income from Operations at Rs 1734 crores up by 4%
Profit from Ordinary activities after finance charge but before exceptional items at Rs 201 crores up by 39%
Group Consolidated Net Profit at Rs 120 crores up by 52%
Tata Global Beverages Ltd. today announced its results for the quarter ended June 2016.
The Company has adopted for the first time, Indian Accounting Standards - Ind (AS) from 1st April 2016. Accordingly, the financial results for both the current and previous quarter have been presented as per the principles of Ind (AS). “Income from operations” under the new accounting principles are lower than the numbers reported under the previous GAAP mainly due to the treatment of Joint Ventures and treatment of certain expenditure which are required to be offset from sales under the new standard.
Income from operations, at Rs 1734 crores, increased by 4% as compared to the corresponding quarter of the previous year due to improvements in both branded and non branded operations. Profit from ordinary activity after finance charge but before exceptional items at Rs 201 crores increased by 39% due to improved operating performance, phased outlay on initiatives and higher other income. Group consolidated net profit at Rs 120 crores is higher by 52% as compared to the corresponding quarter of the previous year.
It is to be noted that the Group is reporting other comprehensive income for the first time on adoption of Ind (AS). Other Comprehensive income mainly comprises of foreign currency translation reserve, actuarial gain/loss on employee benefits, fair value changes in the carrying value of investments and hedging reserves. The movement in the current quarter is mainly attributable to the impact of foreign currency translation reserve due to adverse GBP movement against the INR.
The Group has organized its business into Branded Segment and Non Branded Segment. Branded segment has further been sub-categorised as Branded Tea, Branded Coffee and the residual as Branded Others. Accordingly the company has reported under the aforementioned segments.
The quarter saw a continued focus on innovating for growth, strengthening key brands and partnerships.
In the UK, Tetley launched a range of Super Everyday Teas in the black tea segment, following the success of its Super Green and Super Fruits range. Based on the familiar Tetley original blend, Tetley Everyday Tea Boost has added vitamin B6 and Tetley Super Everyday Tea Immune has added vitamin C. These are the first functional black teas to launch in the UK with European Food Standards Agency-approved health claims relating to tiredness and fatigue and immunity. For the third consecutive year, Tetley in the UK has been recognized in the Great Taste Awards, organized by the Guild of Fine Food. The 2016 edition saw four of Tetley’s products receiving a one-star endorsement, rated as ‘Simply Delicious.’ In India, the majority of tea brands in our portfolio recorded good growth. We remain market leaders in the branded black tea segment as well as the green tea segment.
Eight O’ Clock coffee in the USA introduced the Brazilian Breakfast blend which was well received by the trade. The MAP coffee brand in Australia posted growth in coffee pods due to increased sales in the grocery segment. Tata Starbucks continues to expand steadily in India and currently has 84 stores across 7 cities. For the first time, Starbucks in the US will offer a single-origin coffee from India, giving customers from outside the country a unique opportunity to experience a rare, small-lot coffee from the Tata Coffee Nullore Estates located in Coorg.
Tata Gluco Plus, a glucose based beverage available in 5 exciting flavours, recorded significant growth during the quarter aided by distribution expansion and media support. Himalayan natural mineral water recorded good growth, due to growth in traditional trade, e-commerce channels and key accounts.
Mr. Ajoy Misra, Managing Director and CEO of Tata Global Beverages, said – “We have recorded steady growth in a challenging market environment. We continue to strengthen our brands and grow them, based on strong consumer insights while maintaining focus on operational efficiencies. Our focus on the health & wellness trend will continue, we see this as a key opportunity for our products worldwide.”