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Teejay posts Rs. 23 b revenue amidst surged demand for fabric

12 Nov 2021

Teejay Lanka PLC has built on its robust first quarter (Q1) performance in second quarter (Q2) of 2021-22, helped by demand for fabric from strategic customers due to the changing dynamics of the global market, increased capacities, and the depreciation of the Sri Lankan rupee. Teejay Lanka has reported revenue of Rs. 23.1 billion at group level for six months ended 30 September, reflecting topline growth of 71%. Q2 contributed Rs. 12.7 billion to the topline with an improvement of 44% over the corresponding quarter of last year. The group posted profit before tax (PBT) of Rs. 1.15 billion for the six months, up 44%. PBT for the Q2 amounted to Rs. 763.7 million, largely as a result of reduced margins due to predicted raw material and commodity price increases and higher distribution and marketing costs linked to the increased volumes. Group profit after tax (PAT) for the six months improved by a noteworthy 59% to Rs. 954.1 million, despite Q2’s net profit growing by only 2% to Rs. 643.5 million, according to interim financial statements filed by Teejay Lanka with the Colombo Stock Exchange (CSE). Commenting on the group’s performance, Teejay Lanka Chairman Bill Lam said: “While we continue to see growth opportunities, we also see challenges in this turbulent environment, notably increases in the prices of cotton, dyes, chemicals, auxiliaries, and logistics. Considering these factors as well as the challenging operating conditions in the first half due to the Covid-19 waves in India and Sri Lanka, our growth and improvement in profit are noteworthy.” He said the group is strategically approaching suppliers to secure yarns at a better price, and negotiations are in progress with customers to manage the margins at better pricing. “The teams are constantly collaborating with suppliers to minimise the impact of supply chain disruptions and higher freight rates,” Lam added. Teejay Lanka CEO Pubudu De Silva noted that the group’s $ 26 million expansion project in India is progressing to planned timelines, with plant construction ongoing and orders for additional machines placed. “As part of our strategy of adapting to the changing environment we are progressing with an upgrade to the SAP-HANA relational database management system,” he disclosed, adding: “Teejay is navigating the journey to achieve the goal of $ 300 million by 2023 amidst changing business dynamics and uncertainties, with cautiously placed strategies that will achieve the targets set for our stakeholders.” The first textile manufacturer in the country to receive membership of the US Cotton Trust Protocol, Teejay Lanka PLC is a publicly quoted company with 40% public ownership. The company is backed by apparel exporter Brandix Lanka which has a 32% stake. Pacific Textiles of Hong Kong, whose key shareholder is the Tokyo Stock Exchange, listed that Toray Industries Inc., owns 27% of Teejay Lanka.


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