Sri Lankan firm Teejay's revenue surges 70% to Rs 84 bn in FY23

The company posted gross profit of Rs 6.4 billion for FY23, a 39 per cent improvement over the previous year, but witnessed a drop in its gross profit margin from 8.1 per cent to 6.9 per cent in the fourth quarter when compared with the same quarter of the previous year, with capacity underutilisation in all three plants continuing from the third quarter due to the softness in the market, increases in fixed costs due to expansion, and higher operating costs, the company said in a press release.

Teejay Lanka’s profit before tax for FY23 improved by 9 per cent to Rs 3.1 billion but declined by 54 per cent to Rs 409.1 million for the fourth quarter. Income tax nearly tripled to Rs 984.4 million for FY23, and almost quadrupled to Rs 257 million in the fourth quarter as a result of an increase in the tax rate from 14 per cent to 30 per cent. Consequently, the group’s net profit of Rs 2.1 billion for FY23 reflected a decline of 16 per cent, while net profit for the fourth quarter was down 82 per cent to Rs 152.4 million.

Despite these challenges, the company ended FY23 with a noteworthy cash and cash equivalent balance of Rs 11.2 billion, an improvement of 36 per cent over the preceding financial year as a result of liquidation of inventory.

“The volatility in the industry persisted throughout the financial year, with the second half of the year being worse than the first half. The group remained resilient by implementing strategies and innovative solutions to buffer the effects of these external shocks. Although currently experiencing headwinds, we expect an improvement in the forecast year with a pick-up of momentum in the second half of the year,” said Ajit Gunewardene, Teejay Lanka Chairman.

“We have set up the necessary infrastructure and tools to consolidate our services. Digitalisation, reduction of costs, new product development, improving synthetic capacity, and the upliftment and empowerment of our human capital will be our priorities going forward. The immediate six months are expected to be faced with continuing volatility, but the group is confident that it has deployed the necessary resources to remain resilient,” said Pubudu De Silva, CEO.

Teejay Lanka was the first textile manufacturer in Sri Lanka to receive membership of the US Cotton Trust Protocol and is a public quoted company with 40 per cent public ownership. The company is backed by Sri Lanka’s largest apparel exporter Brandix Lanka which has a 32 per cent stake. Pacific Textiles of Hong Kong, whose key shareholder is the Tokyo Stock Exchange listed Toray Industries Inc, owns 27 per cent of Teejay Lanka.

Furthermore, Teejay Lanka was ranked the number 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.

The company has been adjudged the best textile exporter in Sri Lanka at the Presidential Export Awards presented by the Export Development Board (EDB) and has been named among the 100 most respected companies in Sri Lanka by LMD.

Fibre2Fashion News Desk (DP)