Kolkata, May 28 (IANS) Lower global tea prices and stress on the crops due to shortage of rain resulted in world’s largest tea producer, McLeod Russel posting a severe decline of 88 percent in its net profit in 2014-15.

Against a profit of Rs.257.15 crore during 2013-14, the firm was able to only make Rs.31.17 crore barely managing to keep its margins positive.

Its earnings also declined by 8 percent during fiscal 2015 with the firm posting a net revenue of Rs.1,645.95 crore against Rs.1,788.76 crore in 2013-14.

Higher tea prices in India occurring due to lower tea production provided some respite to the company’s topline.

Compared to fiscal 2014, its quantity sales declined by 42 lakh kg (lkg) during 2014-15. The company managed to sell 1,068 lkg of tea in 2014-15 compared to the sale of 1,110 lkg in 2013-14.

The Kolkata-headquartered company said its performance was impacted by lower production in India and substantially lower prices in global markets except India.

Indian production was lower at 1,185 million kg (mkg) during the calendar year 2014 as compared to 1,200 mkg during 2013 due to unfavorable weather conditions particularly in Assam.

The company said exports were lower by 20 mkg mainly on account of higher production in Kenya and the geo-political unrest backed by the currency fluctuation amongst consuming countries like Russia, in the Middle East, Egypt and Pakistan.

Contrary to the global trends, tea prices in India were higher by three percent mainly due to lower production, strong consumption growth and a low opening inventory.

The tea prices for the company for the fiscal were higher by Rs.5 per kg at Rs.173 as compared to last year.

Despite the crop loss in India, its global tea gardens in Vietnam, Uganda and Rwanda achieved production of 27.3 mkg during 2014-15 compared to 25.5 mkg in 2013-14.