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Heritage Foods profits fall

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By Jim Cornall+

15-Aug-2017

Heritage saw profits fall, but the company was busy, acquiring the dairy business of Reliance Retail Limited.
Heritage saw profits fall, but the company was busy, acquiring the dairy business of Reliance Retail Limited.

Indian dairy company Heritage Foods has published its financial results for the quarter ending June 30, 2017.

Total revenue for the quarter rose from Rs 4.684bn ($72.9m) to Rs 6.183bn ($96.3m), however, profit for the period fell from Rs 171.1m ($2.6m) in the second quarter of 2016 to Rs 103.7m ($1.6m) for Q2 2017.

Dairy revenue increased by 32% to Rs 6.092bn ($94.9m) in Q2, however total profit before tax fell from Rs 333m ($5.2m) in the same period of 2016 to Rs 157m ($2.4m) in 2017.

Acquisition and JV set up

During the quarter, the company completed the acquisition of the dairy business of Reliance Retail Limited (RRL).

The deal, which was announced in October 2016, includes the entire dairy business of RRL and its brands, Dairy Life and Dairy Pure. Products include packed milk, flavored milk, butter, ghee, curd, dairy whitener, sweets and skimmed milk powder.

RRL’s dairy operations generated Rs 5.33bn ($83m)in 2015-16, and it currently procures 225,000 liters of milk per day from 2,400 villages in 10 states.

Heritage Foods has also entered into an agreement with the French dairy company Novandie, a subsidiary of Andros, to set up a joint venture for manufacturing flavoured yogurt and desserts.

Production is expected to commence in 2018, with an initial annual capacity of 20 tonnes per day.

Heritage Foods is based in Hyderabad, and was formed in 1992. Its range includes a variety of milk products and beverages.

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