Teejay Lanka PLC has reported profit before tax of Rs. 501.7 million at group level for the final quarter of 2017-18, to end a challenging year with a noteworthy resurgence that augurs well for Sri Lanka’s only multinational textile manufacturer.
The weft knit fabric specialist with manufacturing operations in Sri Lanka and India achieved a 27 per cent growth in pre-tax profit for the three months ended March 31, 2018, an improvement of Rs. 105.6 million over the corresponding quarter of the previous year despite higher raw material prices in global markets.
The Teejay Lanka PLC Chairman, Mr. Bill Lam, said the momentum generated by the strong performance of the fourth quarter with investments in expansion during the year and a full order book are an indication of a promising first quarter of 2018-19 and an equally promising full year.
Mr. Lam attributed the group’s strong performance in the fourth quarter predominantly to capacity expansion, higher efficiencies, exciting innovations, the group’s growing product portfolio, its success in reducing administration costs by 15 per cent through cost control initiatives and containing the growth in distribution cost to a marginal 4 per cent with the increase in line with the sales growth.
“It has been a strong finish to the financial year considering the challenges we faced in the preceding quarters,” Mr. Lam said, commenting on the group’s results. “We are now well-positioned for 2018-19, especially with the completion of the expansion of our plant in India, which has doubled its capacity in anticipation of our foray into new markets.”
He disclosed that the group closed the year with a cash balance of Rs 3.5 billion while increasing its inventory balances as a result of the expansion in capacity and a strong order book, and maintained an optimised working capital despite the expansion in India, which entailed an investment of $15 million.
Group revenue for the 12 months ended March 31, 2018, was up 12 per cent to Rs. 24.7 billion, while profit before tax for the period was Rs. 1.8 billion.
Looking ahead, Mr. Lam said the group has positioned itself during the year to reap the benefits of GSP through its capacity expansion. Teejay’s manufacturing facilities are currently at optimal operating capacity and strategies have been initiated to pursue new opportunities from leveraging the group’s regional footing, providing flexible and better solutions and broadening its customer portfolio. “The year ahead looks exciting with the transformations that have been carried out, and we will continue to improve and sustain our performance while increasing value to our shareholders,” he added.
One of the region’s largest textile manufacturers, Teejay supplies fabric to some of the best international brands across the world. Teejay Lanka PLC is a public quoted company with 39 per cent public ownership. The company is backed by Sri Lanka’s largest apparel exporter, Brandix Lanka, which has a 33 per cent stake, and Pacific Textiles of Hong Kong which owns 28 per cent of the company.
Teejay has been listed on the Colombo Stock Exchange (CSE) since 2011 and was included in the S&P Top 20 Index in Sri Lanka last year. The company has also been named among the Forbes ‘200 Best under a Billion in Asia’ and been recognised as the ‘International Textile Firm of the Year’ and the ‘International Dyer and Finisher’ by the World Textile Institute, London.