Teejay Lanka consolidates in Q2 to post 6-month revenue of Rs. 23.1 b

Thursday, 11 November 2021 02:43 - - {{hitsCtrl.values.hits}}

Chairman Bill Lam (left) and CEO Pubudu De Silva

Topline grows 71% on higher demand for fabric
Net profit improves by 59% to Rs. 954.1 m for 1H

Teejay Lanka PLC said yesterday that it had built on its robust first quarter performance in Q2 of 2021-22, helped by strong demand for fabric from strategic customers, due to the changing dynamics of the global market, increased capacities and the depreciation of the rupee.

Sri Lanka’s leading fabric manufacturer has reported revenue of Rs. 23.1 billion at group level for the six months ending 30 September 2021, reflecting topline growth of 71%. The second quarter contributed Rs. 12.7 billion to the topline, with an improvement of 44% over the corresponding quarter of last year.

The group posted Profit Before Tax (PBT) of Rs. 1.15 billion for the six months, up 44%. Pre-tax profit for the second quarter amounted to Rs. 763.7 million, largely as a result of reduced margins due to predicted raw material and commodity price increases and higher distribution and marketing costs linked to the increased volumes.

Group Profit After Tax (PAT) for the six months improved by a noteworthy 59% to Rs. 954.1 million, despite the second quarter’s net profit growing by only 2% to Rs. 643.5 million, according to interim financial statements filed by Teejay Lanka with the Colombo Stock Exchange (CSE).

Commenting on the group’s performance, Teejay Lanka Chairman Bill Lam said: “While we continue to see growth opportunities, we also see challenges in this turbulent environment, notably increases in the prices of cotton, dyes, chemicals, auxiliaries and logistics. Considering these factors, as well as the challenging operating conditions in the first half due to the COVID waves in India and Sri Lanka, our growth and improvement in profit are noteworthy.”

He said the group was strategically approaching suppliers to secure yarns at a better price, and that negotiations were in progress with customers to manage the margins at better pricing. “The teams are constantly collaborating with suppliers to minimise the impact of supply chain disruptions and higher freight rates,” Lam added.

Teejay Lanka CEO Pubudu De Silva noted that the group’s $ 26 million expansion project in India wa progressing as planned, with plant construction ongoing and orders for additional machines placed. “As part of our strategy of adapting to the changing environment we are progressing with an upgrade to the SAP-HANA relational database management system,” he disclosed. “Teejay is navigating the journey to achieve the goal of $ 300 million by 2023 amidst changing business dynamics and uncertainties, with cautiously-placed strategies that will achieve the targets set for our stakeholders.”