Net profit improves by 23% to Rs 1.7 billion with higher productivity reducing impact of rising raw material costs
Improved demand from the region and enhanced capacity have helped Teejay Lanka PLC to post Group revenue of Rs 36.1 billion for the nine months ending 31st December 2021 and record strong topline growth of 64% over the corresponding period of the previous year.
A period described by Chairman Mr Bill Lam as less disrupted by COVID-19 than in 2020, the nine months saw Teejay Lanka counter increases in raw material prices with enhanced productivity to achieve gross profit of Rs 3.2 billion and profit after tax of Rs 1.7 billion, an improvement of 23%.
In the three months ending 31st December 2021 Teejay Lanka increased revenue by 53% to Rs 13 billion, but with raw material costs rising ahead of the corresponding product price increases, profit after tax for the quarter declined by 5% to Rs 738 million.
The Group has continued its strong balance sheet, to end the nine months reviewed with a cash balance of Rs 4.4 billion.
Elaborating on the results for the period, Mr Lam said the increases in raw material costs was the biggest challenge faced by the Group with increases in the prices of yarn, energy, freight, dyes, chemicals and auxiliaries reducing margins. However, the operational excellence initiatives implemented over the past two years helped mitigate the impact to some extent.
Teejay Lanka CEO Mr Pubudu De Silva said the Group remains confident of maintaining growth and delivering value to shareholders on a continuous basis, with the anticipated benefits of an integrated Enterprise Resource Planning (ERP) solution with the implementation of SAP S4 HANA, to take advantage of the expansion across the Group.
Among these expansions is a US$ 26 million development at Teejay India which is scheduled to come on stream from February 2022 and will increase production by 20 tons a day by September this year, Mr De Silva said.
Teejay Lanka was the first textile manufacturer in Sri Lanka to receive membership of the US Cotton Trust Protocol, and is a public quoted company with 40 per cent public ownership. The company is backed by Sri Lanka’s largest apparel exporter Brandix Lanka which has a 32 per cent stake. Pacific Textiles of Hong Kong whose key shareholder is the Tokyo Stock Exchange listed Toray Industries Inc., owns 27 per cent of Teejay Lanka.
The Company has been adjudged the Best Textile Exporter in Sri Lanka at the Presidential Export Awards presented by the Export Development Board (EDB) and has been named among the 100 Most Respected Companies in Sri Lanka by LMD.
An ISO 9001:2015, ISO 14001:2015 and OHSAS 18001:2007 compliant company and the first in the industry to develop green fabric, Teejay has been listed on the Colombo Stock Exchange (CSE) since 2011 and was included in the S&P Top 20 Index in Sri Lanka. The Company has also been named among the Forbes ‘200 Best under a Billion in Asia’ and been recognised as the ‘International Textile Firm of the Year’ and the ‘International Dyer and Finisher’ by World Textile Institute, London.