Sri Lanka’s multinational textile manufacturer, Teejay Lanka PLC has ended financial year 2018-19 on an impressive note, with consistent sales and profit gains of the preceding months bolstered by robust growth in the final quarter, the Group’s sixth consecutive quarter of profit growth.
Economy of scale benefits generated by record production volumes from its expanded manufacturing facilities in India and cost-control and process improvement initiatives combined to enable the Weft knit fabric specialist to post profit before tax of Rs 2.17 billion for the 12 months ending March 31, 2019, an improvement of 19.5 per cent on revenue of Rs. 31.7 billion, which was up 29 per cent.
Group profit after tax grew by 17 per cent to Rs. 1.86 billion consequent to income tax for the year increasing by 40 per cent, Teejay Lanka said in a filing with the Colombo Stock Exchange (CSE).
Revenue in the fourth quarter of 2018-19 at Rs. 8.82 billion reflected an improvement of 35 per cent over the corresponding quarter of the previous year, while net profit for the quarter grew by 19 per cent to Rs. 605.7 million, a spokesman for the company said.
Teejay Lanka Chairman Bill Lam described the year as “a very successful” one for Teejay, in which the Group overcame challenging global market conditions through capacity expansion and internal measures.
“Prices of our main raw material, cotton yarn, increased in the beginning of the year and stabilised during Q4. Dyes and chemical costs increased significantly due to the challenges faced by the suppliers. We also saw utility prices increase during the year which was directly attributable to the global movement of fuel prices. Through process improvements and price revisions on finished goods, we were able to mitigate part of the cost escalation,” he said.
Lam said that the Teejay Group continued its strong Balance Sheet from the previous year with a net cash balance of Rs. 4.9 billion. “Commitment and discipline are especially evident as the Group is debt-free despite the on-going expansion projects,” he said.
“The Group has been able to introduce two key global customers to its portfolio in the financial year and is on track to create strategic business partnerships for the future,” he added. “We have also been able to build further on strong existing customer relationships by providing viable solutions for continuous growth.”
Looking ahead, Lam said, “Amidst challenging global market conditions, Teejay Group will continue to focus on its journey towards achieving excellence through process alignment and wastage reduction.
We remain optimistic that rationalisation of the cost base and continuous focus on operational excellence, product innovation and development, will help deliver sustainable profits.”