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Teejay Lanka Chairman Ajit Gunewardene (left) and CEO Pubudu De Silva
Teejay Lanka PLC has reported a revenue milestone of Rs. 50 billion at Group level for FY 2021-22, achieving its first annual sales of a quarter of a billion in dollar terms at the rates of exchange that prevailed during the year.
A strong fourth quarter during which revenue grew 38% to Rs. 13.5 billion, the highest quarter revenue since the company’s inception, enabled Sri Lanka’s largest textile manufacturer to achieve 12-month sales growth of Rs. 17.8 billion or 56% to end what was a challenging year for businesses in general, on a high note.
The Group posted profit before tax of Rs. 2.887 billion and net profit of Rs. 2.517 billion for the year ending 31 March 2022, recording healthy growth of 11% and 18% respectively. Net profit for the fourth quarter was Rs. 826.2 million, reflecting an improvement of 9%.
At company level, Teejay Lanka increased revenue by 40% to Rs. 29.4 billion for the year, and reported pre-tax profit of Rs. 2.6 billion and net profit of Rs. 2.4 billion, achieving growth of 23% and 24% respectively.
Elaborating on the Group’s performance, Teejay Lanka Chairman Ajit Gunewardene said the revenue increase was the result of increased demand from the region. The enhanced volumes were delivered with the increased capacity within the Group and the support of outsourced partners, he said.
Gunewardene said, however, that margins had been impacted during the year because of the upsurges in the prices of cotton, oil, freight, dyes, chemicals, and auxiliaries. “The increase in the costs of inputs has been the biggest challenge during the year,” he said, disclosing that enhancing efficiency within the Group and increasing prices to customers were the key strategies to counter the challenge.
Teejay Lanka CEO Pubudu De Silva said the $ 26 million expansion project of Teejay India has been completed and is now adding 20 tons a day to Group capacity to serve customers with on-time deliveries.
“This is the foundation for our $ 300 million target and we now look forward to growth beyond that figure,” he said, explaining that: “Teejay India is extremely important to us as a strategic location because India is an apparel hub and enables us to be well-positioned to gain from the anticipated booms in the apparel industries of countries like Bangladesh and Indonesia. Additionally, the major suppliers of raw materials like yarn, dyes and chemicals are present in India.”
De Silva added that the Teejay Group has kicked off a few key strategic initiatives in order to enter the next phase of growth. “Besides the Teejay India capacity expansion project, Teejay is moving towards an integrated ERP solution with the implementation SAP S4 HANA across the Group, and remains confident of maintaining growth and delivering value to shareholders on a continuous basis,” he said.
Notably, the Group has continued its strong balance sheet, to end the year reviewed with a cash balance of Rs. 7.8 billion. Teejay Lanka was the first textile manufacturer in Sri Lanka to receive membership of the US Cotton Trust Protocol, and is a public quoted company with 40% public ownership. The company is backed by Sri Lanka’s largest apparel exporter Brandix Lanka which has a 32%. 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.
An ISO 9001:2015, ISO 14001:2015 and OHSAS 18001:2007 compliant company and the first in the industry to develop green fabric, Teejay has been listed on the Colombo Stock Exchange (CSE) since 2011 and was included in the S&P Top 20 Index in Sri Lanka. The company has also been named among the Forbes ‘200 Best under a Billion in Asia’ and been recognised as the ‘International Textile Firm of the Year’ and the ‘International Dyer and Finisher’ by World Textile Institute, London.
