Sri Lanka’s Teejay achieves US$ 250 million in sales in 2021-22
The Morning: Teejay Lanka PLC has reported a revenue milestone of Rs. 50 billion at Group level for FY 2021-22, achieving its first annual sales of a quarter of a billion in US dollar terms at the rates of exchange that prevailed during the year.
Elaborating on the group’s performance, Teejay Lanka Chairman Ajit Gunewardene said the revenue increase was the result of increased demand from the region. The enhanced volumes were delivered with the increased capacity within the group and the support of outsourced partners, he said.
A strong fourth quarter during which revenue grew 38% to Rs. 13.5 billion, the highest quarter revenue since the company’s inception, enabled Sri Lanka’s largest textile manufacturer to achieve 12-month sales growth of Rs. 17.8 billion or 56% to end what was a challenging year for businesses in general, on a high note.
Gunewardene said, however, that margins had been impacted during the year because of the upsurges in the prices of cotton, oil, freight, dyes, chemicals, and auxiliaries. “The increase in the costs of inputs has been the biggest challenge during the year,” he said, disclosing that enhancing efficiency within the group and increasing prices to customers were the key strategies to counter the challenge.
The group posted profit before tax of Rs. 2.887 billion and net profit of Rs. 2.517 billion for the year ending 31 March 2022, recording healthy growth of 11% and 18% respectively. Net profit for the fourth quarter was Rs. 826.2 million, reflecting an improvement of 9%.
At company level, Teejay Lanka increased revenue by 40% to Rs. 29.4 billion for the year, and reported pre-tax profit of Rs. 2.6 billion and net profit of Rs. 2.4 billion, achieving growth of 23% and 24%, respectively.
Teejay Lanka CEO Pubudu De Silva said the $ 26 million expansion project of Teejay India has been completed and is now adding 20 tonnes a day to group capacity to serve customers with on-time deliveries.
“This is the foundation for our $ 300 million target and we now look forward to growth beyond that figure,” he said, adding: “Teejay India is extremely important to us as a strategic location because India is an apparel hub and enables us to be well-positioned to gain from the anticipated boom in the apparel industries of countries like Bangladesh and Indonesia. Additionally, the major suppliers of raw materials like yarn, dyes and chemicals are present in India.”
De Silva added that the Teejay Group has kicked off a few key strategic initiatives in order to enter the next phase of growth.
“Besides the Teejay India capacity expansion project, Teejay is moving towards an integrated ERP solution with the implementation SAP S4 HANA across the Group, and remains confident of maintaining growth and delivering value to shareholders on a continuous basis,” he said.
Notably, the group has continued its strong balance sheet, to end the year reviewed with a cash balance of Rs. 7.8 billion.
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% public ownership. The company is backed by Sri Lanka’s largest apparel exporter Brandix Lanka which has a 32% stake. Pacific Textiles of Hong Kong whose key shareholder is the Tokyo Stock Exchange listed Toray Industries Inc., owns 27% 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.
OSL take:
The sales recorded by one of Sri Lanka’s key textile exporters is indicative of the strength and growth of the country’s exports industry, especially the local apparel industry. Apparel exports are one of Sri Lanka’s key exports as well as revenue generators of the country. The many trade agreements and trade concessions enjoyed by the country have also helped boost Sri Lanka’s apparel exports sector. The performance of Teejay Lanka is also indicative of the growth and business potential in Sri Lanka’s apparel industry. The government of Sri Lanka has also launched a dedicated fabric park to help the local apparel industry to become more competitive in the international market. The country’s export authorities are also engaged in a continuous campaign to explore new foreign markets for local exports. Given the growth momentum in the country’s apparel industry and its increasing business potential, foreign businesses/investors could confidently explore the growing opportunities in Sri Lanka’s apparel industry.
| Article Code : | VBS/AT/31052022/Z_2 |