Teejay posts positive 3Q performance despite market challenges

Teejay Lanka PLC has maintained its positive trajectory in the third quarter of 2023-24 (3Q23), recording a pre- and post-tax profit growth, reversing the losses of the corresponding quarter of the previous year.
Sri Lanka’s first multinational textile manufacturer has reported profit before tax of Rs. 677.7 million for the third quarter of the financial year, as against a pre-tax loss of Rs 24.4 million for the third quarter of 2022-23, recording growth of 2870 percent.

The Group posted a net profit of Rs. 477.4 million for the three months. This is a gain of Rs. 843.3 million or 230 percent over the net loss of Rs. 366 million reported for the corresponding three months of the preceding year.
The Group’s revenue for the quarter reviewed, at Rs. 15.9 billion, was down 12 percent over the Rs. 18.1 billion recorded in the corresponding quarter of the last financial year. 

Nevertheless, the Group’s top line improved by 2.2 percent over the figure for the second quarter of 2023-24, the company said.

For the nine months ending 31st December 2023, Teejay Lanka reported revenue of Rs 45.44 billion, profit before tax of Rs. 1.2 billion, and net profit of Rs. 567 million, reflecting declines of 32 percent, 56 percent and 71 percent respectively over the first nine months of 2022-23.

Teejay Lanka Chairman Ajit Gunewardene said the consistent challenges presented by on-going industry uncertainties have prompted the Group to respond proactively by entering a recovery phase. This involves implementing strategies such as identifying new customer bases, introducing novel product segments, investing in advanced infrastructure, and enhancing skills to adapt to evolving industry dynamics. 
“These initiatives position Teejay Group effectively to meet the evolving needs of a dynamic market,” Gunewardene said.

Commenting on the Group’s performance in the third quarter, Teejay Lanka CEO Pubudu De Silva disclosed that positive outcomes were achieved due to a timely execution of strategic initiatives during the period under review, including stringent inventory management initiatives and effective cost reduction strategies.  

The Group’s advantage due to its multinational footing offers it the flexibility to capitalise on its location advantages to optimise capacity utilisation and operational efficiency. Additionally, the sustained stability in yarn prices has positively contributed to the growth of the Group’s top-line and profitability,” he said.