Friday Nov 15, 2024
Friday Nov 15, 2024
Friday, 30 January 2015 00:35 - - {{hitsCtrl.values.hits}}
Lam further stated that with demand from its main customers back on track, TJL was able to record a strong revenue growth of 12% year-on-year for 3Q FY2014/15, and report an impressive Rs. 3.8 billion in sales. The better demand conditions also enabled TJL to improve its product mix and achieve higher levels of production efficiencies through optimal capacity utilisation and planning. This in turn allowed the company to expand its gross profit margins to 12.8% from 10.6% of last year, causing gross profit to rise 34% to Rs. 481 million for 3Q FY2014/15.
The strong performance at gross profit level also enabled TJL to post an operating profit of approximately Rs. 354 million and record 34% year-over-year growth at the operating profit level as well. According to Lam, this was achieved despite a 25% year-on-year increase in administrative and distribution expenses largely due to increases in provisions and some increases in training and development expenses.
TJL continued to maintain its near debt-free balance sheet as at 31 December 2014, with a net cash position of Rs. 1.65 billion. TJL’s strong cash generation ability has enabled it to increase its net cash position by 33% compared to Rs. 1.24 billion recorded as at 30 September 2014. However, due to increased levels of investment and working capital, the net cash balance was 29% less compared to the same period of the previous year.
Lower interest rates, combined with a lower cash position compared to a year before contributed to net finance income coming in at Rs. 9 million for 3Q FY2014/15, compared to Rs. 22 million in the corresponding quarter of last year. The quarter closed at a net profit of Rs. 376 million, a significant increase of 25% from last year, pushing up the net profit for nine months ended 31 December 2014 to Rs. 822 million, putting it back on track to achieve a strong annual performance despite the setbacks during the early part of the year.
Commenting on the strategic initiatives, Lam highlighted that the operational ramp up of the multi-fuel boiler is progressing well though slightly behind schedule. This was due to the fine tuning work being undertaken to achieve the envisaged level of efficiencies during the testing phase. The plant is expected to commence full scale operations in the coming quarter.
He concluded by stating that with TJL’s additional capacity of 10-12% coupled with the continuous focus on improving its capabilities and demand from its main markets back on track, the management is confident that the company will continue its growth and create shareholder value for the foreseeable future.
