Sri Lanka fabric maker net down 30-pct; hopes up on GSP+
ECONOMYNEXT – Teejay Lanka Plc, a Sri Lanka-based fabric maker said profits fell 30 percent to 473 million rupees in the December 2016 quarter amid higher raw material costs and the end of a tax holiday but future growth will be helped by resumed trade access to the European Union.
The setbacks were temporary and the group was also expanding capacity in India.
"As regional expansion plans move forward to secure Teejay’s long term growth trajectory, the prospects of GSP Plus in the future would further augment the Group’s progress in to the future," Chairman Bill Lam told shareholders.
The group reported earnings of 68 cents per share for the quarter. For the nine months to December it reported earnings of 2.10 rupees per share on profits of 1,462 million rupees up 9 percent from a year earlier.
Teejay group revenues rose 14 percent to 6.34 billion rupees, cost of sales rose at a faster 20 percent to 5.5 billion rupees making gross profits fall 15 percent to 831 million rupees.
Chairman Bill Lam said higher raw material costs, lack of coal in the island which pushed up energy prices were among reasons for lower gross profits.
The firm’s tax holiday at also ended in the latter half of the year, pushing the income tax bill to 78 million rupees from 22 million a year earlier. (Colombo/Jan27/2016)