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Analyst Meet / AGM - Analyst Meet
Prices of Arabica and Robusta have started firming up
Tata Coffee
17-May-2013, 05:03
The company held its Analyst Meet on 14th May'13 and was addressed by key management
The company held its Analyst Meet on 14th May'13 and was addressed by key management
Key highlights
- For FY'13, Tata coffee's, consolidated net sales grew by 17% and PBT before EO was up by 47%. Higher realizations and better capacity utilization of Instant coffee division, contributed significantly to the profits. Higher pepper prices also aided the profitability.
- In plantation business, Arabica and Robusta sales volume were down by about 18% and 17% respectively for the company, but there was a significant higher per kg realization. Also Tea plantations realizations also improved during FY'13 on y.o.y basis. For the whole year, pepper production and realization per kg was also higher.
- For Q4 FY'13, however the PBT was down by nearly 49%, largely due to lower sales volume of Arabica and Pepper plantation business. Realizations were steady on y.o.y basis. There were some one off items like additional gratuity of Rs 3.25 crore and disputed tax liability of Rs 3.24 crore during Q4 FY'13.
- FY'13 was a surplus year for coffee production worldwide and this is reflected as a downward trend on the terminal prices from Oct'12 onwards. Also both Brazil and Vietnam the world's largest players of coffee producers have held back their stocks. As per the management, one can see both Robusta and Arabica prices slightly firming up but the trend is difficult to gauge.
- Going forward, the company has plans for new product developments in instant coffee business and focus will be on new and premium products and new and premium markets.
- FY'13 was an off year for Arabica, and company's focus will be on re planting and higher volumes for FY'14. The company has comfortable order book position for Q1 FY'14 and is gearing for more facilities and production for FY'14 and FY'15 targets.
- Overall, FY'14 to be much better year as higher realization in instant coffee, together with higher production of Arabica and Robusta will aid the growth.
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