Teejay Lanka PLC has reported a 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 the textile manufacturer.
The Weft knit fabric specialist with manufacturing operations in Sri Lanka and India, achieved a 27% growth in pre-tax profit for the three months ending 31st March 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%..
Profit after tax for the quarter totalled Rs 508.4 million, an increase of 3 % principally due to a 93 % 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.
“It has been a strong finish to the financial year considering the challenges we faced in preceding quarters,” Mr 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 sad.”
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.
Elaborating on the accelerated growth of Teejay Lanka PLC in the latter half of 2017-18, Mr Lam pointed out that the Group had transformed a first half net profit of Rs 590 million to a net profit of Rs 1 billion in the second half to end with a net profit of Rs 1.6 billion for the full year.
Group revenue for the 12 months ended 31st March 2018 was up 12 per cent to Rs 24.7 billion while profit before tax for the period was Rs 1.8 billion.
Looking ahead, Lam said the Group has positioned itself during the year to reap the benefits of GSP through its capacity expansion.
“The year ahead looks exciting with the transformations that have been carried out and we will continue to improve and sustain our performance while increasing value to our shareholders,” he added.