Sri Lanka’s Teejay net profits surge in Sept on higher sales
ECONOMYNEXT- Teejay Lanka Plc, a knit fabric manufacturer with operations in Sri Lanka and India, said its net profits grew for the eighth straight quarter in September, up 84 percent to 783.2 million rupees, on higher sales.
The firm’s interim financials said it made 1.12 rupees in earnings per share. For the first six months of the financial year, Teejay posted 1.76 rupees in earnings per share. The Teejay share closed flat at 40 rupees a share on Wednesday.
Revenue for the September quarter grew 22 percent to 9.3 billion rupees while cost of sales grew at a slower 18 percent to 8 billion rupees, leading to gross profits rising 51 percent to 1.3 billion rupees.
Teejay Chairman Bill Lam said that revenue grew due to improved product mix and internal efficiencies, while cost of sales grew slowly due to stabilization of cotton prices.
Improvements in the supply chain and production led to lower wastage of raw materials and reduced overheads, he said.
“The rupee depreciation also contributed to keeping the expenses lower than the sales growth,” he said.
Global trade wars are affecting Teejay, Lam said.
“During these times of intense competition resulting in the global trade wars continue and will continue to pose challenges on our selling prices, margins and volume in the coming quarters,” he said.
However, Teejay is investing in capacity enhancements, modernization and operational efficiencies to withstand challenges, Lam said.
The Group’s capital work in progress totalled 725 million rupees at end-September from 119.1 million rupees at end-March.
The firm has also signed an agreement with Luen Fung Textiles of China to product lace fabrics.
Teejay’s net finance costs for the September quarter fell 96 percent to 686,000 rupees.
Group long-term borrowings for the period ending September fell to 647.8 million rupees from 801.2 million rupees six months earlier, while short-term borrowings grew to 3.2 billion rupees from 2.2 billion rupees.