Top textile maker Teejay Lanka knits strong start to FY23

Sri Lanka’s largest textile manufacturer Teejay Lanka PLC has made a positive start to FY23 posting a group revenue of Rs 23.9 billion for the three months ending 30th June 2022.

The group achieved nearly half its full-year revenue of 2021-22 in just the first quarter of the new financial year as a result of the low base of the previous financial year due to the impacts of COVID, the depreciation of the rupee and the passing on of yarn price increases during the last quarter. 

The cost of sales for the first quarter stood at Rs.21.7 billion, representing  126 percent increase when compared to the first quarter of the previous year. Teejay said the period experienced changes in factors such as increases in volume, increase in raw material prices and increase in costs to acquire dyes and fuel.

In a filing with the Colombo Stock Exchange (CSE), the company said it recorded significant growth in pre-tax and net profit at both group and company levels in the quarter reviewed.

According to interim financial statements, the group profit before tax for the three months grew by more than Rs. 1 billion or 291 percent to Rs 1.5 billion, while the group net profit for the period was up 301 percent to Rs 1.2 billion.
At the company level, revenue improved by 108 percent in the quarter under review to Rs. 12.9 billion, while profit before tax grew by 323 percent to Rs. 1.5 billion, and net profit increased by 311 percent to Rs 1.3billion.

Teejay Lanka PLC has notified the CSE that its director board has proposed the payment of a final dividend of Rs 1.50 per share to the company’s shareholders for the year ended 31st March 2022.

Commenting on these results, Teejay Lanka Chairman Ajit Gunewardene said, “Our performance in the first quarter is extremely encouraging for all stakeholders, especially in the context of the continuing local and global challenges. The group completed a US$ 26 million expansion project at Teejay India, adding 20 tonnes a day to capacity. At the same time, India is viewed as an important strategic location positioning Teejay to gain from the anticipated growth in the apparel industries of countries like Bangladesh and Indonesia.”

Teejay Lanka CEO Pubudu De Silva added, “With the global increase in yarn prices coinciding with the depreciation of the Rupee, Teejay had an opportunity to strategically capitalise on its status as a preferred supplier to several international markets to increase sales income. We also embarked on several strategic initiatives to expedite progress. We focussed on new product development and digitalisation, to modernise operations and embrace an Environmental, Social and Governance or ESG framework. Headway was made in these aspects and progress was made in terms of expanding the Group’s synthetic footprint.”