Record Q4 enables Teejay to end 2021 strong despite pandemic

Teejay Lanka Chairman Bill Lam (left) and CEO Pubudu De Silva 

Strong revenue and profit growth in the fourth quarter at both Group and company level have enabled Teejay Lanka PLC to significantly minimise the impact of the pandemic-affected first quarter on the Group’s full-year results and end 2020-21 on a resilient footing.

Sri Lanka’s top textile manufacturer has reported profit before tax of Rs. 902.8 million at Group level for the three months ending 31 March, reflecting growth of 67% over the corresponding quarter of the previous year, with revenue growing 40% to Rs. 9.770 billion, its highest quarterly revenue since inception.

Group profit after tax improved by an even more impressive 80% to Rs. 760.8 million. Over the preceding three quarters of the year, Teejay Lanka posted a Q1 net loss of Rs. 31.5 million, a net profit of Rs. 631.3 million in Q2, and a net profit of Rs. 778.4 million for Q3.

Revenue for the quarter at Company level was up 56% to Rs. 6.297 billion, profit before tax grew by 52% to Rs. 599.4 million and net profit increased by 65% to Rs. 575 million, Teejay Lanka said in a filing with the Colombo Stock Exchange (CSE).

As reported in previous disclosures of quarterly results, the impact of the extreme adversity of the first quarter of the year continued to be visible in the Group’s cumulative results for the full year, albeit at substantially lower levels than witnessed at the preceding quarters. Group revenue for the year ending 31 March was down 4% to Rs. 31.853 billion, in contrast to the 16% decline at the end of Q3.

Similarly, Group profit before tax for the year, at Rs. 2.650 billion reflected a reduction of 6% as against 26% at the end of Q3, while profit after tax for the year declined by 10% to Rs. 2.139 billion, improving significantly from 30% negative as at 31st December 2020.

Commenting on these results, Teejay Lanka Chairman Bill Lam said: “I’m happy to announce that as a Group, Teejay has performed well in the 2020-21 financial year while battling with the pandemic. The Group was able to continue its operations at all three plants by adhering to government health protocols to cater to the world fashion and textile industry.”

He disclosed that the Group closed the year with a consolidated debt-free balance sheet, with a cash balance of Rs. 6.2 billion. 

Teejay Lanka CEO Pubudu De Silva said the Group had kept administration costs to Rs. 1.356 billion which is a decline of 5%, while marketing and distribution costs were curtailed to Rs. 148 million, a decline of 24%. An increase in yarn prices seen in the fourth quarter will continue to be prevalent in the first quarter of the New Year, he said. 

De Silva said the expansion of Teejay’s India plant is within the planned timeline despite the disruptions of the COVID-19 pandemic. The investment of $ 26 million will result in the plant’s daily output increasing to 20 tons, and contribute to the Group’s target of becoming a $ 300 million business. 

“Furthermore, our investments to modernise the plants in both India and Sri Lanka are in progress,” he said. “These investments made in these turbulent times will undoubtedly position Teejay as the leader in the textile arena of South Asia and will establish the Company’s footprint to compete in the market in the new normal environment.”