Teejay Lanka PLC, one of Sri Lanka's top textile manufacturers, has staged a remarkable comeback in the second quarter of the fiscal year 2023-24, signaling a strong revival from its earlier losses. The company reported a profit before tax of Rs 1.2 billion for the three months ending on September 30, 2023, marking a substantial gain of Rs 1.9 billion compared to the preceding quarter, reflecting a remarkable quarter-on-quarter growth of 275%.
The net profit for the same period was Rs 943 million, representing a gain of Rs 1.8 billion from the net loss of Rs 853 million reported in the first quarter, marking a significant quarter-on-quarter gain of 211%. Teejay Lanka's revenue for the reviewed quarter reached Rs 15.5 billion, an 11% increase from the previous quarter.
Teejay Lanka Chairman, Ajit Gunewardene, attributed this impressive turnaround to a series of strategic initiatives and changing market conditions. Despite lower figures compared to the previous year due to sales volume decreases, Rupee appreciation, and underutilization of capacity, Teejay Lanka demonstrated resilience in a challenging economic backdrop.
However, the Group expressed concern about the impact of changes in taxation, which resulted in a 121% increase in taxes for the Group during the quarter. For the first half of 2023-24, Teejay Lanka reported revenue declines of 39%, profit before tax declined by 81%, and net profit saw a sharp 96% drop compared to the first half of the previous year.
Despite the challenging environment, Teejay Lanka maintains a strong Balance Sheet with a substantial cash and cash equivalents balance of Rs 12.9 billion. CEO, Pubudu De Silva highlighted the success of strategies like identifying new customers, introducing new product segments, capacity optimization, and investment in advanced infrastructure.
Teejay Lanka's affiliation with the US Cotton Trust Protocol and its impressive transparency in corporate reporting underline the company's resilience and commitment to adapting to evolving industry dynamics.
