Sri Lanka’s JAT Holdings reports topline growth amidst export growth of 130%
Daily FT: JAT Holdings PLC, has reported robust financial performance for Q2 of FY 2023/24, recently.
Most notably, the Group recorded its highest-ever Export Turnover at Rs. 1,827 million, against Rs. 795 million in the corresponding period in the year prior, a growth of 130%, driven in part by market expansion. Alongside this, the Group also recorded a healthy 11% growth in Revenue to Rs. 4,878 million, up from Rs. 4,392 million in the first six months of FY 2023/24, compared to the same period in the year prior. Gross Profits too rose marginally by 2% during the same period to Rs. 1,417 million, from Rs. 1,383 million in the previous year.
Meanwhile, the Group has achieved significant growth through its manufacturing operations in Bangladesh, led by its new plant, which has been supported by value engineering driven by JAT Holdings’ cutting-edge R&D Facility in Sri Lanka. These developments, along with other contributors to business expansion, including exports, have helped to drive significant topline growth for the Group.
JAT Holdings PLC’s Profit Before Tax for the quarter under review, however, recorded a decline, though this has been driven by conscious strategic decisions taken to strengthen the Group’s brand portfolio and its long-term market share. Amongst these decisions have been diversification into the Group’s joint venture in the Kingdom of Saudi Arabia to further the development of its network of EV chargers. The Group has also invested heavily into the incorporation of JAT Paints Africa Ltd., its Pintharoo Shilpee Abhiman program in partnership with NAITA and Sirasa to build equity around painters and wood craftsmen, forward vertical integration through JAT Showrooms in the Maldives, Bangladesh and Australia, and backward vertical integration through its new binder plant in Sri Lanka and its alkyd plant in Bangladesh, along with important investments into digitalization and the Group’s technology infrastructure.
Commenting on the Group’s strategic initiatives, particularly in response to the crises that have emerged in the recent past, JAT Holdings PLC CEO Nishal Ferdinando said: “While the Group’s financial position remains robust, and our performance has been satisfactory, we have consciously decided to invest heavily in our brand portfolio and infrastructure in order to continue to deliver exceptional value to our stakeholders over the medium- and long-term. Accordingly, we have shifted our focus to export expansion and maximizing operating efficiencies through automation and effective cost management, which are helping to further consolidate and strengthen our balance sheet, whilst maintaining a positive cash flow and adequate liquidity to meet our objectives.”
JAT Holdings PLC Founder and Managing Director Aelian Gunawardene said: “In our quest to deliver maximum value to our stakeholders, we continue to focus on our strengths and address any weaknesses that may emerge, whilst taking a long-term approach to secure our brand equity, supply chains and our communities. Particularly in terms of our communities, we are continuing to extend relief schemes to cushion our people from the economic challenges, whilst doubling down on efforts such as Pintharoo Shilpee Abhiman, which are helping vulnerable communities at the grassroots level.”
Amidst a challenging economic landscape, JAT Holdings PLC said it recorded robust financial performance driven by significant growth in the export sector, following strategic investments made to build brand equity and strengthen backward vertical integration, which the Group believes will support its long-term growth and competitiveness, as it allows the company to have more control over its supply chain and reduce dependency on external suppliers.
Sri Lanka’s private sector has shown great resilience and strength even amidst challenging economic conditions faced by the country in the past few years. It is also indicative of the overall strength and growth of the country’s economy. Sri Lanka’s manufacturing and export sectors are two of the key sectors that have recorded a steady growth through the years shoeing topline growth I many local private sector businesses. It is this that has led to many local businesses, including JAT Holdings, to expand operations into the international markets while recording impressive growth and profits. The growth in the export sector has helped many local businesses in the past few years. With local authorities focused on further expanding the sector through aggressive promotions, diversification of the local product portfolio and introducing attractive incentive schemes, foreign businesses/investors could explore the expanding opportunities in Sri Lanka’s export sector while also looking at forming partnerships or joint ventures with local businesses engaged in the industry with the aim of further expansion.
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