Sri Lankaâ€™s Teejay Lanka December quarter net profit up 12-pct
ECONOMYNEXT – Teejay Lanka’s net profit rose 12 percent to 551 million rupees in the December 2018 quarter from a year ago with higher sales, better capacity use especially in India and a weaker rupee, although in dollar terms earnings were flat.
The Sri Lankan fabric supplier’s sales in the third quarter of 2018-19 were up 28 percent to 8.48 billion rupees, interim accounts filed with the stock exchange showed.
Quarterly earnings per share were 78 cents. Teejay Lanka’s share closed at 34 rupees Thursday, down 40 cents or 1.16 percent.
In the nine months to December 2018, EPS was 1.79 rupees with sales up 26 percent to 23 billion rupees and net profit up 16 percent to 1.26 billion rupees.
Teejay Lanka Chairman Bill Lam said in a statement that this was the fifth consecutive quarter of sales and profit growth, “demonstrating its resilience during a period of higher raw material and utility costs.”
The growth was achieved by operating at optimal capacity with the margin for the quarter improving to 12.3 percent from 11.2 percent on a quarter-on-quarter basis “as a result of better loading and an improved mix via the group’s US and EU business units,” he said.
“Additionally, improved capacity utilisation across the group, mainly with Teejay India’s expanded capacity exceeding expectations with optimum production and capacity utilisation, had contributed to the performance,” he said.
“The depreciating rupee and cost reduction initiatives also helped to keep overhead cost increases below revenue growth, Lam explained.
Teejay Group had a strong order book for the final quarter of 2018-19, projecting strong numbers for the group, he said.
“While we continue to see growth opportunities for Teejay Group, we also see challenges, foremost among them sale mix and raw material price volatility and increases in utility costs,” Lam said.
“Despite the challenging market conditions, the group is optimistic that with a strong order book, capacity optimisation and the depreciation of the rupee, it will end the financial year on a strong footing.”
In dollar terms, December 2018 quarter profit growth was flat at 3.3 million.
A weft knit fabric specialist with manufacturing operations in Sri Lanka and India, Teejay is one of the region’s largest textile manufacturers, and supplies fabric to some of the top international brands, a statement said.
One of Sri Lanka’s largest apparel exporters, Brandix Lanka has a 33 percent stake in Teejay Lanka and Pacific Textiles of Hong Kong 28 percent.
(Colombo/February 07/2019 – SB)