Teejay Lanka revenue reaches Rs. 48.6 billion in 2Q22.
The Morning: Teejay Lanka PLCs, by the end of the second quarter of 2022-23, reported revenue of Rs. 48.6 billion and a net profit of Rs. 2.3 billion at the group level for the six months ending on 30 September 2022, nearly achieving the corresponding figures of Rs. 49.6 billion and Rs. 2.5 billion recorded for 2021-22.
Teejay Lanka Chairman Ajit Gunewardene commented, however, that price hikes in raw materials, freight, and energy had also increased the cost of sales, which for the second quarter alone stood at Rs 22.6 billion, representing a 96% increase.
“The period ahead is going to be challenging, yet we remain optimistic that the strategies implemented will enable the group to continue with its growth trajectory to achieve its $ 300 million target in the coming years in line with the expanded capacity completed in September 2022,” Gunewardene said.
The group’s six-month revenue grew by 111% over the revenue of the first half of the preceding year, while net profit growth for the period reviewed was 145%.
“While there is a slowdown in the global demand for apparel, the group is confident that it would be able to maintain its momentum by capitalising on newly emerging market segments and its synthetic fabric drive,” Gunewardene stated.
For the second quarter of FY 2022-23, Teejay Lanka posted revenue of Rs 24.8 billion reflecting growth of 95% and profit after tax (PAT) of Rs. 1.1 billion, an increase of 70%.
Elaborating further, Teejay Lanka CEO Pubudu De Silva said: “Teejay has achieved growth by focusing on its athleisure lines, synthetic orders, new customer segments, and Asian markets. The ‘China Plus One’ strategy adopted by customers to shift demand from China to South Asian markets has opened up many opportunities for fabric and apparel manufacturers. We will continue to explore opportunities for growth by discovering new business and are evaluating the potential for capturing new international markets, going forward.”
The Teejay Group closed the second quarter with a strong balance sheet, reporting a cash balance of Rs 8.1 billion.
Furthermore, the group recorded a net asset base of Rs 36.5 billion and a net assets value per share of Rs 50.9, reflecting a 99% increase over the same period of the previous year.
Teejay Lanka was the first textile manufacturer in Sri Lanka to receive membership of the US Cotton Trust Protocol and is a publicly listed 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:
Sri Lanka’s manufacturing and exports sectors have shown a steady growth despite challenging economic conditions in the country. Businesses engaged in these two sectors have also posted impressive profits, indicating the resilience, strength and growth of Sri Lanka’s private sector. Among the businesses engaged in the exports industry, the apparel industry businesses have posted a continuous growth and profits. The many trade agreements and trade concessions enjoyed by Sri Lanka have also helped boost Sri Lanka’s exports, especially apparel exports. All these are indicative of an expansion in business/investment opportunities in Sri Lanka’s apparel exports sector. Given the growth and business potential in the industry and the incentives offered by the local authorities, foreign businesses/investors could explore the growing opportunities in Sri Lanka’s exports industry, especially in the apparel sector. Foreign businesses could also look at forming partnerships or joint ventures with local businesses engaged in the apparel sector with the aim of expanding operations locally and internationally.
| Article Code : | VBS/AT/11112022/AT_1 |