McLeod Russel, the world’s largest tea grower, expects its profitability to improve in 2013-14 on the back of improved production and steady prices.
According to Aditya Khaitan, Managing Director of McLeod, though tea prices were ruling firm in FY13, lower tea output from its Indian plantations coupled with a sharp increase in costs on the back of a wage settlement and other input costs, including power and fuel, impacted its profitability.
“This year production is looking better and prices are likely to be steady. We expect profitability to improve by the end of this fiscal,” Khaitan told newspersons on the sidelines of the company’s 15th annual general meeting here on Friday.
In 2012-13 the company’s EBITDA (earnings before interest, taxes, depreciation and amortisation) margin as a percentage of sales declined to 24.26 per cent as compared to 28.48 per cent in 2011-12.