Increase in commodity prices along with higher ad spends led Tata Global Beverages to post a 34.83 per cent drop in consolidated net profit at Rs 254.33crore (Rs 390.30crore) for the year ended March 31, 2011.
Net sales, however, grew 3.44 per cent from Rs 5,782.95 crore to Rs 5,982.42 crore.
“The company has been operating in a challenging environment. Consumer mindset has been affected by weak consumer confidence. There has been price increases in commodities, low interest earnings and the competitive intensity has increased,'' said Mr Percy Siganporia, Deputy CEO, at a press conference.
Maintaining its volume leadership in the tea category, the company has been spending heavily on brand building.
“Our brand building costs have increased 20 per cent and are in excess of Rs 40 crore this year. There have been new campaigns for Chakra Gold and Jaago Re,'' added Mr Siganporia. Investments in advertising and sales increased from Rs 985.47 crore to Rs 1,012.62 crore.
CEO quits
In a statement to the BSE, the company said Mr Peter Unsworth, CEO, will leave the company by June 30, 2011. He has taken this decision for personal reasons. As an interim measure, Mr Percy Siganporia will take over the responsibilities of CEO.
The company's shares fell 3.55 per cent to Rs 92.05.