Teejay Lanka PLC has reported profit before tax of Rs 501.7 million at Group level for the final quarter of 2017-18, to end a challenging year with a noteworthy resurgence that augurs well for Sri Lanka’s only multinational textile manufacturer.
The Weft knit fabric specialist with manufacturing operations in Sri Lanka and India, achieved a 27 per cent growth in pre-tax profit for the three months ending March 31, 2018, an improvement of Rs 105.6 million over the corresponding quarter of the previous year despite higher raw material prices in global markets.
Teejay Lanka PLC chairman Bill Lam said the momentum generated by the strong performance of the fourth quarter with investments in expansion during the year and a full order book are an indication of a promising first quarter of 2018-19 and a promising full year.
Group revenue for the quarter reviewed grew 13 per cent to Rs 6.6 billion and gross profit improved by 11 per cent to Rs 731.8 million, Teejay Lanka said in a filing with the Colombo Stock Exchange (CSE).
Operating profit at Rs 486.7 million for the three months reflected a healthy growth of 31 per cent.
Profit after tax for the quarter totalled Rs 508.4 million, an increase of 3 per cent principally due to a 93 per cent increase in income tax which resulted in a deferred tax asset of Rs 97.6 million as a one-off gain in the fourth quarter of 2016-17 reducing to Rs 6.7 million for the three months reviewed.
Lam attributed the Group’s strong performance in the fourth quarter predominantly to capacity expansion, higher efficiencies, exciting innovations, the Group’s growing product portfolio, its success in reducing administration costs by 15 per cent through cost control initiatives and containing the growth in distribution cost to a marginal 4 per cent with the increase in line with sales growth.
“It has been a strong finish to the financial year considering the challenges we faced in preceding quarters,” Lam said, commenting on the Group’s results. “We are now well-positioned for 2018-19, especially with the completion of the expansion of our plant in India, which has doubled its capacity in anticipation of our foray into new markets.”
He disclosed that the Group closed the year with a cash balance of Rs 3.5 billion while increasing its inventory balances as a result of the expansion in capacity and a strong order book, and maintained an optimised working capital despite the expansion in India, which entailed an investment of US$ 15 million.