Higher prices, rupee depreciation boost Teejay 2Q performance

A doubling of synthetic fabric volumes, higher selling prices and the impacts of the depreciation of the rupee have generated a strong growth for Teejay Lanka PLC, enabling Sri Lanka’s first multinational textile producer to close in on its preceding full-year revenue and profit figures by the end of the second quarter of FY 2022-23.

Teejay Lanka has reported revenue of Rs.48.6 billion and net profit of Rs.2.3 billion at group level for the six months ending on September 30, 2022, nearly achieving the corresponding figures of Rs.49.6 billion and Rs.2.5 billion recorded for 2021-22.

The group’s six-month revenue grew by 111 percent over the revenue of the first half of the preceding year, while the net profit growth for the period reviewed was 145 percent.

For the second quarter of FY 2022-23, Teejay Lanka posted revenue of Rs.24.8 billion, reflecting a growth of 95 percent and profit after tax of Rs.1.1 billion, an increase of 70 percent.

Teejay Lanka Chairman Ajit Gunewardene commented however, that the price hikes in raw materials, freight and energy had also increased the cost of sales, which for the second quarter alone stood at Rs.22.6 billion, representing a 96 percent increase.  “The period ahead is going to be a challenge, yet we remain optimistic that the strategies implemented will enable the group to continue with its growth trajectory to achieve its US $ 300 million target in the coming years in line with the expanded capacity completed in September 2022,” Gunewardene said.

“While there is a slowdown in the global demand for apparel, the group is confident that it would be able to maintain its momentum by capitalising on newly emerging market segments and its synthetic fabric drive.” Elaborating, Teejay Lanka CEO Pubudu De Silva said, “Teejay has achieved growth by focusing on its athleisure lines, synthetic orders, new customer segments and Asian markets. 

The ‘China Plus One’ strategy adopted by customers to shift demand from China to South Asian markets has opened up many opportunities for fabric and apparel manufacturers.  We will continue to explore opportunities for growth by discovering new business and are evaluating the potential for capturing new international markets, going forward.”

 Teejay Group closed the second quarter with a strong balance sheet, reporting a cash balance of Rs.8.1 billion. Furthermore, the group recorded a net asset base of Rs.36.5 billion and a net assets value per share of Rs.50.9, reflecting a 99 percent increase over the same period of the previous year.