Topline grows 71% on higher demand for fabric
Net profit improves by 59% to Rs 954.1 million for 1H
Teejay Lanka PLC has built on its robust first quarter performance in Q2 of 2021-22, helped by strong demand for fabric from strategic customers due to the changing dynamics of the global market, increased capacities and the depreciation of the Rupee.
Sri Lanka’s leading fabric manufacturer has reported revenue of Rs 23.1 billion at Group level for the six months ending 30th September 2021, reflecting topline growth of 71%. The second quarter contributed Rs 12.7 billion to the topline with an improvement of 44% over the corresponding quarter of last year.
The Group posted profit before tax of Rs 1.15 billion for the six months, up 44%. Pre-tax profit for the second quarter amounted to Rs 763.7 million, largely as a result of reduced margins due to predicted raw material and commodity price increases and higher distribution and marketing costs linked to the increased volumes.
Group profit after tax for the six months improved by a noteworthy 59% to Rs 954.1 million despite the second quarter’s net profit growing by only 2% to Rs 643.5 million, according to interim financial statements filed by Teejay Lanka with the Colombo Stock Exchange (CSE).
Commenting on the Group’s performance, Teejay Lanka Chairman Mr Bill Lam said: “While we continue to see growth opportunities, we also see challenges in this turbulent environment, notably increases in the prices of cotton, dyes, chemicals, auxiliaries and logistics. Considering these factors as well as the challenging operating conditions in the first half due to the Covid waves in India and Sri Lanka, our growth and improvement in profit are noteworthy.”
He said the Group is strategically approaching suppliers to secure yarns at a better price, and negotiations are in progress with customers to manage the margins at better pricing. “The teams are constantly collaborating with suppliers to minimise the impact of supply chain disruptions and higher freight rates,”Mr Lam added.
Teejay Lanka CEO Mr Pubudu De Silva noted that the Group’s US$ 26 million expansion project in India is progressing to planned timelines, with plant construction ongoing and orders for additional machines placed. “As part of our strategy of adapting to the changing environment we are progressing with an upgrade to the SAP-HANA relational database management system,” he disclosed, adding that “Teejay is navigating the journey to achieve the goal of US$ 300 million by 2023 amidst changing business dynamics and uncertainties, with cautiously-placed strategies that will achieve the targets set for our stakeholders.”
Sri Lanka’s largest textile manufacturer and the first textile manufacturer in the country to receive membership of the US Cotton Trust Protocol, Teejay Lanka PLC 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.