Improved demand from the region and enhanced capacity have helped Teejay Lanka PLC to post Group revenue of Rs 36.1 billion for the nine months ending December 31, 2021 and record strong topline growth of 64% over the corresponding period of the previous year.
A period described by Chairman Bill Lam as less disrupted by Covid-19 than in 2020, the nine months saw Teejay Lanka counter increases in raw material prices with enhanced productivity to achieve gross profit of Rs. 3.2 billion and profit after tax of Rs. 1.7 billion, an improvement of 23%.
In the three months ending December 31, 2021 Teejay Lanka increased revenue by 53% to Rs. 13 billion, but with raw material costs rising ahead of the corresponding product price increases, profit after tax for the quarter declined by 5% to Rs. 738 million. The Group has continued its strong balance sheet, to end the nine months reviewed with a cash balance of Rs. 4.4 billion.
Chairman Lam said the increases in raw material costs was the biggest challenge faced by the Group with increases in the prices of yarn, energy, freight, dyes, chemicals and auxiliaries reducing margins. However, the operational excellence initiatives implemented over the past two years helped mitigate the impact to some extent.
Teejay Lanka CEO Pubudu de Silva said the Group remains confident of maintaining growth and delivering value to shareholders on a continuous basis, with the anticipated benefits of an integrated Enterprise Resource Planning (ERP) solution with the implementation of SAP S4 HANA, to take advantage of the expansion across the Group.
Among these expansions is a US$ 26 million development at Teejay India which is scheduled to come on stream from February 2022 and will increase production by 20tons a day by September this year, De Silva said.
Teejay Lanka was the first textile manufacturer in Sri Lanka to receive membership of the US Cotton Trust Protocol, and is a public quoted company with 40 per cent public ownership. The company is backed by Sri Lanka’s largest apparel exporter Brandix Lanka which has a 32 percent stake. Pacific Textiles of Hong Kong whose key shareholder is the Tokyo Stock Exchange listed Toray Industries Inc., owns 27 percent of Teejay Lanka.