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Teejay records a positive Q3 despite market challenges

  • 05 Feb 2024
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Teejay Lanka PLC has maintained its positive trajectory in the third quarter of 2023-24, recording noteworthy pre- and post-tax profit growth for the three months ending 31st December 2023 and reversing the losses of the corresponding quarter of the previous year.

Sri Lanka’s first multinational textile manufacturer has reported profit before tax of Rs 677.7 million for the third quarter of the financial year, as against a pre-tax loss of Rs 24.4 million for the third quarter of 2022-23, recording growth of 2870%.

The Group posted a net profit of Rs 477.4 million for the three months, a gain of Rs 843.3 million or 230% over the net loss of Rs 366 million reported for the corresponding three months of the preceding year.

The Group’s revenue for the quarter reviewed, at Rs 15.9 billion, was down 12% over the Rs 18.1 billion recorded in the corresponding quarter of the last financial year. Nevertheless, the Group’s top line improved by 2.2% over the figure for the second quarter of 2023-24, the Company said.

For the nine months ending 31st December 2023, Teejay Lanka reported revenue of Rs 45.44 billion, profit before tax of Rs 1.2 billion, and net profit of Rs 567 million, reflecting declines of 32%, 56% and 71% respectively over the first nine months of 2022-23.

Teejay Lanka Chairman Mr Ajit Gunewardene said the consistent challenges presented by on-going industry uncertainties have prompted the Group to respond proactively by entering a recovery phase. This involves implementing strategies such as identifying new customer bases, introducing novel product segments, investing in advanced infrastructure, and enhancing skills to adapt to evolving industry dynamics. “These initiatives position Teejay Group effectively to meet the evolving needs of a dynamic market,” Mr Gunewardene said.

Commenting on the Group’s performance in the third quarter, Teejay Lanka CEO Mr Pubudu De Silva disclosed that positive outcomes were achieved due to a timely execution of strategic initiatives during the period under review, including stringent inventory management initiatives and effective cost reduction strategies.  “The Group’s advantage due to its multinational footing offers it the flexibility to capitalise on its location advantages to optimise capacity utilisation and operational efficiency. Additionally, the sustained stability in yarn prices has positively contributed to the growth of the Group's top-line and profitability,” he said.

The Teejay Group owns manufacturing facilities in Sri Lanka and India, along with a state-of-the-art printing facility in Sri Lanka. An ISO 9001:2015, ISO 14001:2015 and OHSAS 18001:2007 compliant company and the first in the industry to develop green fabric, Teejay Lanka was also the first textile manufacturer in Sri Lanka to receive membership of the US Cotton Trust Protocol. Teejay is a public quoted company with 40 per cent public ownership and the backing of Sri Lanka’s largest apparel exporter Brandix Lanka which has a 33 per cent stake in the Company. Pacific Textiles of Hong Kong, whose key shareholder is the Tokyo Stock Exchange listed Toray Industries Inc., owns 27 per cent of Teejay Lanka.

Teejay Lanka was ranked the No 1 corporate entity among 100 public listed companies in Sri Lanka for Transparency in Corporate Reporting in the TRAC 2022 assessment carried out by Transparency International Sri Lanka (TISL), the local arm of the international corruption watchdog. The TISL assessment was carried out on three areas crucial to fighting and preventing corruption: reporting on anti-corruption programmes, transparency in company holdings and the disclosure of key financial information in domestic operations.

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