Strong Q4 net profit growth boosts Teejay Lanka’s outlook for year ahead

Friday, 17 May 2024 00:47 - - {{hitsCtrl.values.hits}}

Chairman Ajit Gunewardene (left) and CEO Pubudu De Silva

Strong net profit growth in the final quarter of 2023-24 has enabled Teejay Lanka PLC to end the financial year on an optimistic note despite the impacts of the appreciation of the Rupee, which contributed to its 12-month results falling below those of the preceding year

Sri Lanka’s first multinational textile manufacturer has reported net profit of Rs. 549.1 million for the three months ending 31 March 2024, up 260% over the corresponding quarter of the previous year and a 15% improvement over the preceding quarter.

Despite an increase in sales volumes, the Group’s revenue for the quarter, at Rs 15.3 billion, was down 4% over the figure for the third quarter of the year and 12% lower than the revenue of the corresponding quarter of the previous year. This was due to the appreciation of the Sri Lanka Rupee.

For the year ending 31 March 2024, Teejay Lanka reported revenue of Rs. 60.8 billion, profit before tax of Rs. 1.6 billion, and net profit of Rs. 1.1 billion, reflecting declines of 28%, 49% and 48% respectively over 2022-23 as a result of the softening of the global market conditions during the year.

Nevertheless, the Group ended the financial year with a strong balance sheet with a cash and cash equivalents balance of Rs. 8.9 billion and a net assets base of Rs. 30.1 billion. Teejay’s net assets value per share of Rs. 42 was lower by 6% when compared to the corresponding quarter, stemming from the strengthening of the Rupee against the Dollar, the Group said.

Teejay Lanka CEO Pubudu De Silva said: “The Group has reported gross profit of Rs. 1.5 billion representing a year-on-year increase of 27% and a 17% increase when compared to the third quarter, as a result of the effective utilisation of the Group’s capacity at its two locations. Further optimisation of capacity utilisation and operational efficiency and stability in yarn prices have positively contributed to this growth, strengthening our confidence for the year ahead.”

Teejay Lanka Chairman Ajit Gunewardene said it was encouraging to note the success of the multifaceted strategic initiatives undertaken to reverse the losses of the first quarter and to respond to market dynamics.

“The Group’s long-term priorities include digitalization, establishing and executing a robust ESG framework, reducing costs, developing new products, enhancing synthetic capacity, and uplifting and empowering human capital to enhance resourcefulness. These strategies are expected to come into effect in the current financial year, indicating promising prospects for the future and enabling the Group to mitigate the impact of identified pressures, volatilities, and challenges,” Gunawardene added,

The Teejay Group owns manufacturing facilities in Sri Lanka and India, along with a state-of-the-art printing facility in Sri Lanka.