Tea business and dividend from 8’o clock coffee powers Tata Coffee

21 Jan 2009

Surge in revenues and profits in the tea business and Rs 14.7 crore (US$ 6 million) dividend from wholly owned subsidiary Eight O’clock coffee company together lead to three fold increase (305% increase) in profits of Tata Coffee to Rs 12.2 crore, despite 9% fall in the top line to Rs 67.1 crore in the quarter ended December 2008.


The company’s OPM expanded by 50 bps to 14.3% powered by surge in PBIT margins of the tea business to 27.9% in the quarter ended December 2008 as against negative 8.0% in the corresponding previous quarter. But in the coffee segment, the PBIT margins fell by 790 basis points to 7.8% during this period.


Tea business constituted 20% of revenues, but contributed 47% of PBIT while coffee business constituted 72% of revenues but contributed only 49% of the PBIT.  The company indicated that the results for the quarter ended December 2008 were impacted by the financial crisis prevailing in some of its markets. crackcrack
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