McLeod Russel India Ltd on Monday reported a net loss of Rs 97 crore for the quarter to March 31, 2008, while the net profit for the year crossed Rs 47 crore.
Moran Tea Company (India) Ltd was merged with McLeod following the Calcutta High Court’s sanction in April 2007. Moran Tea became a subsidiary of McLeod Russel from October 2007 when the latter acquired 15,20,000 equity shares, representing 72.38% of the share capital of Moran Tea, from Moran Holdings plc, the UK.
“The entire undertaking of Moran Tea was transferred and vested in McLeod Russel as a going concern with effect from April 1, 2007,” said Deepak Khaitan, executive vice-chairman of the company.
“Following the merger, profitability of the group has not changed much as Moran did not really make money last year,” Khaitan said. “Figures for the last fiscal included transaction from the amalgamation of Moran Tea with the company,” he said.
The net profit of the company for 2007-08 was Rs 47.21 crore as against Rs 47.47 crore in 2006-07. The consolidated net profit, including that of Borelli Tea Holdings Ltd–a wholly-owned subsidiary–was Rs 46.41 crore.
Total production increased by 43 lakh kg during the previous fiscal following the merger of Moran Tea. “We are looking at increasing production from 7.5 crore kg in 2007-08 to 7.7 crore kg in 2008-09,” Khaitan said. The company lost 10 lakh kg crop in March this year owing to unfavourable weather conditions. However, it was recovered in the next month.
Mcleod Russel, which exports almost 40% of its production to countries like the US, the UK, Australia, Germany and Iran, is planning to export 3 crore kg in 2008-09 as against 2.7 crore kg in 2007-08. Production in Kenya is lower this year by almost 4 crore kg till April. “The country is unlikely to make up for the loss and this will create a gap in the international market,” said KK Baheti, director of the company.
“Costs are likely to go up this year owing to increase in fuel prices; fertiliser costs are also going up,” Baheti said.
Shortage created as a result of drought in Kenya, higher demand for orthodox tea in the first three months of 2008, and high prices in Kenya and Sri Lanka are likely to push prices in domestic and international markets.
