JAT posts 67% PAT growth despite Bangladesh crisis

• Profit after tax soars to Rs.512mn against Rs.306mn in previous year 
•  Sri Lanka revenue up by 8% to Rs.3,287mn
•  Group revenue lower by 7% due to Bangladesh crisis 

JAT Holdings PLC, Sri Lanka’s leading wood coatings and brushes provider, showcased strong resilience in the second quarter and first half of the 2025 financial year. 

The company reported a 67 percent increase in profit after tax (PAT) for the six months ending September 30, 2024, reaching Rs.512 million, despite facing challenges in its Bangladesh and the Maldives markets.

Revenue from the group’s Sri Lanka operations grew by 8 percent to Rs.3,287 million during the period. The gross profit margin increased by 2 percent, reflecting the positive impact of JAT’s acrylic binder and alkyd resin manufacturing plants, which have resulted in significant cost efficiencies. Selling and distribution expenses too declined by 10 percent as a result of JAT’s prudent approach to cost management and a strategic increase in marketing spend in the previous year, which are now yielding returns.

However, despite the group’s best mitigation efforts, its operations in Bangladesh were impacted by the adverse macroeconomic and sociopolitical climates that prevailed during the period under review, which was further compounded by a disastrous recent flood. The group’s strategic response to these circumstances, demonstrates its agility and ability to adapt to the changing market conditions. A notable effort has been the recent launch of CoatEx – a cost-effective wood coating product tailored for the, now highly budget-conscious, Bangladeshi market. CoatEx delivers a very effective and affordable product, leveraging JAT’s manufacturing infrastructure in Bangladesh, giving ACL (JAT’s fully-owned subsidiary in Bangladesh) an edge over other import-dependent competitors, who are feeling the pressure of the tight foreign exchange controls.

Accordingly, during the six months ended September 30, 2024, JAT reported a 7 percent decline in total group revenue, recording Rs.4,536 million, compared with Rs.4,878 million in the corresponding period in the year prior. This was led by a 33 percent slump in revenue from Bangladesh, down to Rs.1,148 million. As a result, profit before tax too recorded a marginal 3 percent contraction to Rs.408 million, with finance costs seeing a slight increase due to financing of investments through debt. Meanwhile, revenue from India, the Maldives and other markets recorded a 9 percent dip, with restrictive foreign exchange policies in the Maldives driving the decline.

A 2 percent decrease in gross profit to Rs.1,393 million was also noted during the period under review, attributable to the contraction in revenues. At the same time, administrative expenses rose by 5 percent to Rs.458 million, driven by an increase in salaries and wages. However, the group was able to deliver a stable operating performance during the first half of FY 2024/25, with operating activities generating Rs.521 million, marking a slight increase from the previous year.  JAT Holdings PLC CEO Nishal Ferdinando noted the entity is optimistic that the market is now shifting towards a more favourable macroeconomic environment. 

“We anticipate that the upcoming six months will bring significant progress, meeting our expectations and driving further improvement across our operations,” he said.

Within the company’s wood coatings segment, growth remains steady, strengthened by efficiency gains from in-house binder manufacturing. JAT’s Water-Based Wood Coatings experienced consistent demand, while Emulsions faced some challenges due to a lack of competitive pricing, which the group is addressing through an updated pricing strategy to regain market share. Meanwhile, the brushes category showed solid performance, with consistent growth throughout the period under review, further supported by JAT’s commitment to strengthening local production and R&D.

Discussing the group’s future outlook, JAT Holdings PLC Managing Director Aelian Gunawardene said the entity would continue to invest in initiatives that uplift the communities it serves and create improved customer experiences, building long-term loyalty that strengthens its market position.