February 01, 2017
Tata Global Beverages announces significant increase in profit before exceptional items and group net profits for quarter ended December 2016
Consolidated results for the quarter:
- Income from operations at Rs1,744 crore up by 3 percent
- Profit before exceptional items at Rs146 crore up by 24 percent
- Group consolidated net profit at Rs145 crore up by 119 percent
Tata Global Beverages (TGB) today announced its results for the quarter ended December 2016.
For the quarter, income from operations at Rs1,744 crore increased by 3 percent as compared to corresponding quarter of the previous year. At previous year exchange rate the increase is 5 percent. Profit before exceptional items at Rs146 crore is higher by 24 percent as compared to the corresponding quarter of the previous year despite higher advertising spends on base business and new launches, due to improved operating performance and lower finance costs. Group consolidated net profit for the quarter at Rs145 crore is higher by 119 percent as compared to the corresponding quarter of the previous year reflecting improved operating performance and favourable impact of exceptional items.
The board of directors of TGB, at its meeting held on January 16, 2017, have accorded an in-principle approval for divesting its stake in its joint venture, Zhejiang Tata Tea Extractions Company subject to necessary approvals. The transaction will also be subject to completion of negotiations, definitive agreements and satisfaction of conditions precedent.
Tata Coffee, Indian subsidiary of TGB, has announced setting up a state-of-the-art greenfield freeze-dried coffee plant in Vietnam with an installed capacity of 5,000 MT pa. This move will further strengthen Tata Coffee’s growth in the premium instant coffee segment strengthening the global footprint. Tata Coffee has made significant strides in moving up the coffee quality value chain by focusing on differentiation, premiumisation and consumer centricity.
With effect from October 1, 2016, the group has, pursuant to amendments in a joint venture operating agreement, accounted Empirical Group LLC, in which the group has a holding of 56 percent, as a subsidiary.
The quarter saw sustained progress on earlier product launches and innovation.
In India, Tata Tea Elaichi and the Tata Tea Maharashtra gold mixture – a blend specially crafted for the Maharashtra market, made good progress last quarter. TGB collaborated with Starbucks Teavana to create a signature innovation especially for the Starbucks Teavana™ portfolio in India – the ‘India Spice Majesty blend’ inspired by India’s rich tea legacy. During the quarter, Teaveda was also launched under the Tata Tea brand portfolio. The new offering allows consumers to experience the goodness of Ayurveda in their daily cup of tea, with no compromise on taste. The Tata Tea Teaveda range has three variants – Tata Tea Teaveda in regular loose leaf tea, Tata Tea Teaveda Pro Energy and Tata Tea Teaveda Pro Woman are available in tea bags.
Tetley Super Green tea- fortified with the goodness of vitamins continues to perform well in the UK market. The Tetley Superfruits - Boost Blueberry & Raspberry flavour recently won the Grocer New Product Award for 2016 in the tea & infusions category in UK. The Grocer awards celebrate and reward outstanding innovation in the UK FMCG sector. In the Middle East, Tetley launched new packaging and advertising, encouraging consumers to adopt a healthy lifestyle.
The water portfolio made good progress during the quarter. Himalayan natural mineral water clocked good growth due to growth in traditional trade, e-commerce and key accounts. Tata Gluco Plus and Tata Water plus also showed good growth, supported by distribution expansion and media support.
Ajoy Misra, MD and CEO of TGB, said: “The company recorded significant profit growth last quarter despite higher spends behind brands. Tata Global Beverages is leveraging consumer insights to create magical beverage moments for our consumers. Whether it is capturing white spaces in target markets or strengthening our key brands further, our product and marketing initiatives aim to break clutter and enhance the consumer experience. Along with our tea portfolio, we are focusing on steadily scaling our coffee and water portfolio by creating differentiated brands in these categories.”