Sri Lanka’s Teejay Lanka net up 62-pct on strong orders, rupee collapse

ECONOMYNEXT – Sri Lanka’s Teejay Lanka Plc, a fabric maker which also has facilities in India said profits grew by 62 percent to 453 million rupees on stronger orders and margin growth helped by a collapse of the Indian and Sri Lanka rupee.

The group reported earnings of 65 cents for the June quarter. For the full year to March it had reported earnings of 2.65 rupees per share.

Teejay Lanka closed flat at 37.80 rupees on Wednesday.

Revenues grew 19 percent to 8.12 billion rupees, cost of sales grew at a slower 17 percent to 7.1 billion rupees helping gross profits grow 35 percent to 965 million rupees.

"The growth in Gross Profits were mainly due to the improved product mix, which was facilitated by a strong order book, curbing of non-strategic costs, and process improvements that improved efficiency," Chairman Bill Lam told shareholders.

"We have seen an upsurge of orders from our strategic customers and vendor partners, this momentum of growth."

"All plants of the Group were at efficient capacity utilization, maximizing the production output and serving the growth in Top Line.

Along with these economies ofs cale from expanded capacity, and the depreciation of the SriLankan and Indian rupee assisted in curtailing expenses of the Group."

Raw material costs were however rising, Lam said.

"However, the challenges faced in increases of raw materials are prevalent as utilities and dyes & chemical cost are continuing to increase stemming from world market prices.

"Cotton has stabilized during the quarter, however the demand for cotton is on the rise and may impact adversely in the future." (Colombo/July01/2019)