Teejay Lanka PLC (formerly Textured Jersey), the Sri Lanka headquartered knit fabric solutions provider, has reported revenue of Rs 22.2 billion at Group level and net profit of Rs 2.0 billion for the 12 months ending March 31, 2017, despite substantial increases in raw material costs during much of the year.
In financial statements filed with the Colombo Stock Exchange (CSE) this week, the Group said its achievement of 24.4 per cent top line growth and its success in keeping the reduction in net profit to 9.8 per cent were attributable to its focus during a year of volatility, on capacity utilisation, expanded operations, stringent cost controls and improved production efficiencies.
Prices of cotton yarn, Teejay’s most significant direct cost component, escalated by 20 per cent during nine of the 12 months reviewed, exerting pressure on gross profit margins, which reduced by 39.7 per cent in the fourth quarter alone, the company said. Despite this challenge, the Group achieved revenue of Rs 5.8 billion (up 5.7 per cent) and net profit of Rs 494 million in that quarter.
Acceptance of higher order volumes at lower margins in preparation for growth, product mix changes, shifts and changes in end customer strategy, and a temporary countrywide stock outage in coal during the third quarter, which resulted in energy costs rising, all contributed to the Group’s final annual result.
At standalone company level, Teejay Lanka posted turnover growth of 11.2 per cent to Rs 15.7 billion for the full year and net profit of Rs. 1.5 billion, reflecting an increase of 1.2 per cent over the preceding year.
“This performance is a relatively strong achievement in the context of the volatility in the yarn market,” Teejay Lanka PLC Chairman Bill Lam said. “Improved production efficiencies, stringent overhead controls and process streamlining will play a key role in the new financial year, coupled with the pursuit of a wider customer strategy.” CEO of Teejay, Sriyan de Silva Wijeyeratne said that Teejay is investing approximately US$ 15 million in capacity expansion in India in preparation for future growth through GSP and other initiatives, and that capacity will be available in the second quarter of the current financial year.
Consolidated Earnings per Share (EPS) for the Group stood at Rs 2.80 for the year.