Teejay Lanka nine month revenue increases by 64% to Rs 36.1 billion
Daily FT: Improved demand from the region and enhanced capacity have helped Teejay Lanka PLC to post Group revenue of Rs 36.1 billion for the nine months ending 31st December 2021 and record strong topline growth of 64% over the corresponding period of the previous year.
A period described by Chairman Bill Lam as less disrupted by COVID-19 than in 2020, the nine months saw Teejay Lanka counter increases in raw material prices with enhanced productivity to achieve gross profit of Rs 3.2 billion and profit after tax of Rs 1.7 billion, an improvement of 23%.
In the three months ending 31st December 2021 Teejay Lanka increased revenue by 53% to Rs 13 billion, but with raw material costs rising ahead of the corresponding product price increases, profit after tax for the quarter declined by 5% to Rs 738 million.
The Group has continued its strong balance sheet, to end the nine months reviewed with a cash balance of Rs 4.4 billion.
Elaborating on the results for the period, Lam said the increases in raw material costs was the biggest challenge faced by the Group with increases in the prices of yarn, energy, freight, dyes, chemicals and auxiliaries reducing margins. However, the operational excellence initiatives implemented over the past two years helped mitigate the impact to some extent.
Teejay Lanka CEO Pubudu De Silva said the Group remains confident of maintaining growth and delivering value to shareholders on a continuous basis, with the anticipated benefits of an integrated Enterprise Resource Planning (ERP) solution with the implementation of SAP S4 HANA, to take advantage of the expansion across the Group.
Among these expansions is a US$ 26 million development at Teejay India which is scheduled to come on stream from February 2022 and will increase production by 20 tons a day by September this year, De Silva said.
Sri Lanka’s private sector has shown a growth momentum and profits even amidst the Covid 19 pandemic. This is indicative of the strength and growth of the country’s private sector as well as the overall strength and resilience of Sri Lanka’s economy to external and internal challenges. Sri Lanka’s geographical positioning in the Indian Ocean, the many trade agreements as well as concessions enjoyed by the country and the business conducive environment have all helped boost Sri Lanka’s image as a growing business destination in the South Asian region. Foreign businesses/investors could therefore confidently explore the growing opportunities in Sri Lanka’s expanding economy while also looking at the possibility of forming partnerships or joint ventures with local businesses.
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