Teejay Lanka PLC has begun 2023-24 with a strong balance sheet, closing an extremely challenging first quarter with cash and cash equivalents of Rs 9.6 billion, despite a decline in earnings.
Sri Lanka’s first multinational textile manufacturer has reported revenue of Rs 14 billion for the three months ending 30th June, reflecting a reduction of 41% over the corresponding quarter of the previous year.
The Group posted gross profit of Rs 283 million for the period, which it said is a demonstration of its resilience in a period where industries were challenged with volatilities. Teejay’s gross profit margin reduced to 2% for the period, in contrast to the 6.9% reported at the end of the fourth quarter of 2022-23.
In a filing with the Colombo Stock Exchange (CSE), the Group reported a pre-tax loss of Rs 701 million and a net loss of Rs 853 million for the three months reviewed, attributing the downturn to a drop in sales, the appreciation of the Rupee, fluctuating raw material prices, capacity underutilization and costs associated with inventories. However, Teejay experienced a reduction in inventories during the quarter and is now at low levels, which is a positive sign as the entire supply chain has lowered its inventory levels, the Company said.
Teejay Lanka Chairman Mr Ajit Gunewardene said the Group is confident that it has deployed the necessary resources to remain resilient and is on the path to recovery. “We continue to evaluate the ongoing changes in market dynamics and have begun implementing new long-term strategies and innovative solutions to navigate the effects of identified pressures, volatilities and challenges,” Mr Gunewardene said.
Teejay Lanka CEO Mr Pubudu De Silva added that digitalization, setting and implementing a strong ESG framework, reduction of costs, new product development to improve revenue, improving synthetic capacity, and the upliftment and empowerment of human capital, thus enhancing resourcefulness, are considered the Group’s priorities, going forward.
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 33 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.
An ISO 9001:2015, ISO 14001:2015 and OHSAS 18001:2007 compliant company and the first in the industry to develop green fabric, Teejay Lanka was ranked the No 1 corporate entity among 100 public listed companies in Sri Lanka for Transparency in Corporate Reporting in the TRAC 2022 assessment carried out by Transparency International Sri Lanka (TISL), the local arm of the international corruption watchdog. The TISL assessment was carried out on three areas crucial to fighting and preventing corruption: reporting on anti-corruption programmes, transparency in company holdings and the disclosure of key financial information in domestic operations.