Coffee Day Enterprises Ltd (CDEL) has reported a net profit of ₹1,509 crore for the first quarter mainly due to an exceptional gain of ₹1,659 crore on account of sale of equity stake in IT services company Mindtree to L&T. The board of directors had earlier postponed the declaration of results due to the sudden demise of the company’s founder V.G. Siddhartha.

Revenues for the quarter were down 2 per cent to ₹942 crore. The company’s EBITDA was up 817 per cent at ₹1,879 crore.

The board on Wednesday approved and authorised Malavika Hegde or Jayaraj Hobli, Chief Financial Officer of Coffee Day Global Ltd (CDGL), to finalise the appointment of required agencies for conducting financial, legal and commercial due diligence for the divestment of stake in CDGL. Sources close to the company told BusinessLine that the board will wait for the appropriate time to sell its stake in CDGL, which includes Cafe Coffee Day outlets as it believes that the current valuation of the entity is not good enough. The CDEL board had appointed IDFC Securities to explore a stake sale in Coffee Day Global in its meeting held on September 7, 2019.

Retail revenue

The first-quarter retail revenue of CDGL, which holds the flagship coffee business, stood at ₹361.2 crore, down 0.9 per cent from ₹364.5 crore in the year-ago period. The unit reported ₹67.8 crore of EBIDTA and cash profit of ₹5 crore. However, the PAT is negative at ₹60.8 crore, which includes certain abnormal write-offs and depreciation due to closing of 280 cafes, which was deliberately carried out to improve the operating metrics and profitability.

A statement from the company said the Board of directors approved disclosing the management guided first-quarter numbers since an investigation into the circumstances leading to statements made in the letter of the former Chairman Siddhartha on July 27, 2019, and to scrutinise the books of accounts of the company and its subsidiaries is pending. The company also said in a statement that there will be a delay in announcing the second-quarter results as well.

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