Sri Lanka’s JAT’s first quarter bottom-line up 77% y-o-y
The Morning: JAT Holdings PLC recently released its financials for Q1 of FY25, noting strong growth in both its top- and bottom-line.
Accordingly, revenues rose by 3% to Rs. 2.2 billion compared with the same period in the previous year, driven by noticeable growth in the wood coatings and paint brushes categories.
Profit-after-tax (PAT) also expanded by 77% y-o-y (year-on-year) for the quarter under review to record Rs. 124 million, up from Rs. 70 million in the same quarter of the previous year.
The quarter under review also witnessed certain significant milestones with regard to JAT’s strategy to expand market share and drive overseas expansion.
Accordingly, the Group made its inaugural shipment of wood coatings to Australia, while it also opened showrooms for SEAFORM – the German brand of luxury vanities and kitchens it represents – in both Australia and Bangladesh.
During the quarter under review JAT was also able to record 41% growth in project sales, 15% growth in wood coatings including Sayerlack – its flagship wood coating product, and 47% growth in the paint brushes category.
Commenting on the Group’s performance, CEO Nishal Ferdinando said: “In a quarter where we experienced adverse weather conditions across Sri Lanka, we are proud to have been able to continue to achieve and drive growth in sales and revenue, leveraging our strong brand equity and operational efficiency.”
“It’s also important to note that, while nominal export revenues declined marginally by 6%, on account of exchange rate volatility in the Bangladeshi Taka, our export volumes have remained steady. Thus, we remain firmly on our growth trajectory and will continue to work towards serving our customers and communities, and creating value for our stakeholders,” he added.
JAT Holdings PLC also recorded a 5% growth in gross profits, though growth was subdued by unfavourable exchange rate volatility in the Bangladeshi Taka.
However, operating profits contracted by 27%, due to rising overheads as the Group expands its operations in Bangladesh.
Meanwhile, profit-before-tax (PBT) grew by 37% against the same quarter in the previous year, on account of increased operational efficiencies and favourable movements in the exchange rate of the Sri Lankan rupee.
JAT Holdings PLC Founder and Managing Director Aelian Gunawardene said: “Relying on strategic decision-making, and leveraging the business acumen of our management team, we have been able to harness efficiencies across our supply chain, particularly in terms of our own acrylic binder and alkyd resin plants now being operational, to deliver exceptional value to our stakeholders.”
“Furthermore, our heavy investments into marketing and customer loyalty programmes have demonstrably delivered, allowing us to keep sales steady, and even achieve growth, amidst adverse-weather-driven market conditions that generally result in a contraction in sales volumes for the industry. Thus, we remain committed to our growth strategy and to our loyal customers and communities, while also reaffirming our dedication to sustainable manufacturing,” Gunawardene added.
OSL take:
The steady growth being recorded by Sri Lanka’s JAT Holdings is an indication of the overall growth and expansion of Sri Lanka’s economy. The performance of many private sector businesses in Sri Lanka even amidst the economic crisis faced by the country in the past few years is indicative of the strength, resilience and growth of Sri Lanka’s economy through the years while facing external and internal challenges. The ongoing economic activities and overall expansion have resulted in a growth in the business/investment opportunities in almost every economic sector in the country. Sri Lanka’s geographical positioning in the Indian Ocean, the many trade agreements as well as trade concessions enjoyed with other countries and the country’s target of becoming a hub in the South Asian region have all helped boost Sri Lanka’s image as an emerging business destination among foreign businesses/investors. The ongoing promotional campaigns overseas to attract more foreign investments to the country and the many incentive schemes being offered by the Sri Lankan government also add to the perks of exploring opportunities in Sri Lanka. Apart from exploring the growing business/investment opportunities in the country, foreign businesses could also look at forming partnerships or joint ventures with local businesses to set up bases in Sri Lanka with the aim of further expanding operations locally and internationally.