JAT Holdings posts best Q1 despite pandemic challenges

JAT Holdings Founder and Managing Director Aelian Gunawardene

JAT Holdings CEO Nishal Ferdinando

Amidst adverse economic conditions, compounded by a month-long island-wide lockdown, JAT Holdings has reported outstanding performance in Q1 of FY22, with a record revenue of Rs. 1.4 billion, up from Rs. 485 million a year ago amidst the peak of the

pandemic and Rs. 1 billion in FY20, in the aftermath of the Easter attacks. 

Consolidated Profit After Tax (PAT) for the quarter ended 30 June 2021 was Rs. 161 million, against losses of Rs. 107 million and Rs. 7 million for the same quarter in FY21 and FY20, respectively. As such, the trailing 12 months consolidated PAT of JAT Holdings came in at Rs. 869 million, of which Rs. 782 million accounts for the last three quarters, whilst Rs. 86 million relates to the second quarter of FY21 which was a subdued quarter due to pandemic conditions. JAT is in line to achieve a PAT of Rs. 301 million in the corresponding second quarter of FY22.

Speaking about the company’s Q1 performance, as it stands on the threshold of a public listing, JAT Holdings Founder and Managing Director Aelian Gunawardene said: “Through agile, strategic decisions and the expertise of our diverse corporate management team, we have been able to take the necessary steps to deftly adapt to the post-pandemic environment.” 

“Our excellent business acumen, outstanding resource management and agile manoeuvring are attested to by the incredible performance we have achieved during what can only be described as a very tough quarter. As the year progresses, we anticipate further temperance of the pandemic and a wider recovery of economic activity. We intend to use these improving conditions, and the lessons we have learned, to continue to deliver stellar performance for our shareholders.”

“Since our inception, JAT has been at the forefront of revolutionising the local industry. With a strong focus on ethics and corporate governance, we pivoted to a work-from-home model for our corporate staff and invested into ensuring the safest possible work environments for our manufacturing staff,” said CEO Nishal Ferdinando.

“Additionally, we were one of the few companies to record growth during these trying times, being reaffirmed as an ‘A+ (stable)’ private company for the fifth consecutive year, last year. Needless to say, the organisation’s outstanding performance during the first quarter for FY22 reflects as yet another indication that JAT Holdings will continue to transform the current industry and take Sri Lanka to new heights.” 

Strong local market sales witnessed in the second half of FY21 continued during the period, with the Sri Lankan market contributing 71% of total consolidated revenue for the period, followed by the international market segment which contributed 29% of consolidated revenue during the quarter. Consolidated gross profit margins were recorded at 27%, in line with the budget for the quarter ended June 2021, whilst also demonstrating a margin expansion of around 4%, when compared to Q1 of FY21 and FY20. 

The consolidated PAT of Rs. 161 million accounted for 14% of the planned and targeted profit objective of Rs. 1.2 billion for FY22. JAT typically experiences seasonality in its profitability with around 70% of the full-year PAT being achieved during the second half of the financial year due to seasonally high revenue months such as November, December, February and March. This trend has been prevalent over the years. 

Shares of JAT Holdings is expected to begin trading on the Colombo Stock Exchange approximately around 13 August, subsequent to the conclusion of its initial public offering (IPO), which will open for offers on 20 July. The company intends to use the capital it raises from the public to further its near-term objectives, as outlined in its prospectus. 

These include enhancing existing R&D capabilities through the establishment of a state-of-the-art R&D facility, along with investments in a new manufacturing facility in Bangladesh to boost turnover and margins in that market. The company also plans to invest in the marketing development of its signature line of ‘WHITE by JAT’ premium white paints. 

Investors interested in subscribing to the IPO of JAT Holdings shares may make their subscriptions on or before 20 July by visiting https://ipo.jatholdings.com