Teejay Lanka makes turnaround in 2Q; records Rs.631mn net profit

Chairman Bill Lam (left) and CEO Pubudu De Silva

Listed textile manufacturer, Teejay Lanka PLC, which has operations in Sri Lanka and India said it remains “cautiously optimistic” about the company’s business prospects as Sri Lanka’s situation with regard to fighting the COVID-19 pandemic continues to evolve.

The company made a 180-degree turnaround in performance in the September quarter (2Q21) recording Rs.631.3 million net profit for the quarter against a net loss of Rs.31.5 million in the previous quarter (1Q21) on revenue of Rs.8.8 billion compared to a revenue of Rs.4.7 billion.

However, on a year-on-year basis, the earnings were still down 19 percent. The September quarter earnings per share stood at 90 cents compared to Rs.1.12 a year ago. Likewise, revenue for the quarter under review was also down 6 percent YoY.

Teejay Chairman Bill Lam has said the group remains “cautiously optimistic” as the situation in Sri Lanka continues to evolve, and that with the group’s presence felt throughout the region, Teejay is poised on the cusp of realising its target of becoming a US$ 300 million company in the foreseeable future.

“With the help of the Operational Excellence initiatives launched, the Group continues to focus on cost-control mechanisms,” Lam said. “These initiatives have resulted in managing non-operational and non-strategic costs while re-evaluation of the cost base has given rise to elimination of non-essential costs making Teejay leaner. However, the Group has invested substantially on added health and safety related measures to protect our employees from the pandemic.”

During these times of intense competition resulting from price swings and high demand for low cost products, the group is positioned to capitalise on the opportunity created by customers focussing on supply chain strategising to mitigate reliance on a single country, and equipped with a strong order book is prepared to face any challenge, Lam added.

Teejay Lanka CEO Pubudu De Silva disclosed that Teejay’s operations in India are gathering momentum and had increased their loading capacity during the second quarter. The group has also taken deliberate steps to unfreeze the restrictions on capital expenditure to continue with the modernisation of the plants, he said.

“This 180-degree turnaround in performance would not have been possible if not for the commitment and ingenuity of Team Teejay, which should receive all the credit for the second quarter’s performance,” De Silva said. Teejay Lanka has continued with a strong balance sheet and a cash balance of Rs.5.8 billion at the end of the period reviewed, keeping the company net debt free.