JAT posts highest 1Q revenue for June; earnings record marginal gains

JAT Holdings PLC has achieved its highest ever first quarter revenue in FY 2022/23 though its earnings grew by just 5 percent year-on-year (YoY) to Rs.169 million amid higher finance costs and income tax expenses. 

Total revenue for 1Q grew by a very 39 percent YoY to Rs.1.935 billion, while gross profit in absolute terms rose by 37 percent to Rs.525.6 million. Gross profit margins were maintained unchanged at 27 percent, despite the mounting domestic and external challenges such as Sri Lanka’s multiple crises of economy, energy and foreign exchange, compounded by a global scarcity of raw materials. 

Meanwhile, operating profit grew by 50 percent YoY during the period under review to Rs.280.2 million, up from Rs.186.75 million in the corresponding period. However, the operating profit margin growth was subdued but still recorded an expansion to 14 percent, up from 13 percent. 

The company said this was as a result of various economic relief packages and facilities provided to employees, making it the highest ever increase in salaries, coupled with rising inflation costs and exchange rate volatility. 
The group’s finance costs rose nearly 350 percent YoY to Rs.96.7 million. JAT said the IPO proceeds helped the group to lower its gearing and thereby mitigate the impact coming from higher interest rates in the economy.
JAT’s profit before tax (PBT) grew by 18 percent YoY, demonstrating a sustained momentum of recovery, to Rs.198.8 million. However, the income tax expenditure for the period rose over 300 percent YoY to Rs.30.8 million impacting the net profit.  

The group export revenues dipped by 12 percent YoY, as a result of reorganisation, due to the commencement of operations at the group’s manufacturing facility in Bangladesh, owned and operated through its fully-owned subsidiary, Asia Coatings (Pvt.) Ltd. 

However, export revenues are forecasted to improve drastically, as the operations at the new facility get up to speed. Additionally, the group has placed a strategic focus on developing its export operations, in order to further consolidate its financial and operating position over the rest of the year. 
Revenues from the group’s Sri Lankan operations expanded by a significant 59 percent YoY to Rs.1.576 billion, driven by increased sales, coupled with the effects of input price inflation. 

Meanwhile, all of the business sectors of JAT Holdings PLC recorded healthy to phenomenal gains in terms of revenue growth during the period under review. Its largest business sector, wood coatings, witnessed a 21 percent YoY expansion in revenue, rising to Rs.796 million during the quarter. 

WHITE by JAT saw the largest growth in revenues, driven by growth in the emulsion sector, coupled with increased market share. Accordingly, the sector posted a phenomenal 206 percent YoY revenue growth in the quarter under review to Rs.203.1 million. 
Also, the volume of sales accruing to the group’s paints business rose by a remarkable 49 percent.