Sri Lanka’s Teejay Lanka show rebound in profits in the first quarter
Sri Lanka’s Teejay Lanka has more than doubled its revenue to Rs 10.4 billion at group level for the three months posting growth of 119% and has achieved a 27-fold improvement in its profit before tax (PBT) of Rs. 385 million, and converted last year’s Q1 net loss of Rs. 31.5 million into a post-tax profit of Rs. 310.5 million in Q1, 2021-22, the group’s third consecutive quarter of profit growth, according to local media reports.
Teejay Lanka Chairman Bill Lam has reportedly welcomed the positive start to the new financial year.
He has attributed the growth in turnover to the group’s success in maintaining uninterrupted operations at all three manufacturing plants despite the third wave of Covid-19, additional revenue from outsourced operations in Sri Lanka, and the depreciation of the rupee in the review period.
The turnaround in Q1 profits was achieved through increased volumes, a strong order book, strategic management of yarn price increases, and stringent control of costs, he has said.
At company level, Teejay Lanka has reported PBT of Rs. 347 million for the three months, reflecting growth of 40%, while net profit improved by 50% to Rs. 315 million on revenue of Rs. 6.2 billion, up 65% over the corresponding quarter of the previous year.
Based on these results, Teejay Lanka PLC has proposed an interim dividend of Rs. 1.15 per share in respect of the quarter reviewed. The group has continued its strong debt-free balance sheet from the previous year with a net cash balance of Rs. 4.8 billion, The Morning has stated.
Teejay Lanka CEO Pubudu De Silva has been quoted as saying that the raw materials and cotton prices are at a peak level while the global market remains competitive with changing dynamics. “The group foresaw these challenges during the last financial year and strategically approached its customers to minimise the impact on profits and margins,” he has said, adding that the operational excellence journey has enabled the group to increase productivity while reducing overheads and wastage to reduce the impact on margins.
He has disclosed that expansion of the group’s India plant is within the planned timeline despite the turbulent environment, and investments made are progressing well.
Many local companies have posted impressive growth rates despite facing the impact of the global Covid 19 pandemic. This is indicative of the strength and growth of the country’s private sector. Sri Lanka’s business conducive environment and the constant improvements to the ease of doing business environment in the country have also helped local businesses to grow. It has further helped many local companies to expand operations to foreign countries as well. With Sri Lanka fast becoming a business hub in the South Asian region and the country’s economy returning to normalcy after facing the Covid 19 impact, the island is fas becoming an investment hub in the region.
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