ECONOMYNEXT – Sri Lanka’s Teejay Lanka which also has plants in India said it was getting more orders from a shift from China and Bangladesh, with profits rising amid stable costs and a change in product mix.
Group revenues in the December quarter rose 8 percent to 17.1 billion rupees from 15.89 billion rupees, despite rupee appreciation and cost of sales fell 2 percent to 14.8 billion rupees.
“The increase in revenue can be attributed to several factors such as improvements in our Group’s sales mix and the notable increase in demand and despite the challenges posed by the appreciation of the Rupee,” Teejay Lanka said.
“Furthermore, the Group is witnessing a significant shift of orders to the Asian region due to the China One Plus strategy. This shift presents us with opportunities for increased volume being directed to Sri Lanka and India as a result of offloading from Bangladesh.”
In Sri Lanka energy prices are now market priced regularly (fuel monthly and electricity every six months) allowing costs to fall as the rupee appreciates. Rupee appreciation (or stability) also reduces pressure to increase wages, analysts say.
Teejay group profits in the December quarter grew 105 percent to 978.2 billion rupees, giving earnings of 1.36 rupees per share.
Profits up to December was 1.892 billion rupees, up 234 percent from 567 billion rupees.
“The increase in profit is primarily due to the timely execution of several strategic initiatives & efficient cost reduction strategies, coupled with Teejay’s multinational presence which enabled us with the flexibility to capitalize on our strategic locations,” the firm said.
Standalone group profit for the quarter was 650 million rupees.
Goblal cotton prices were stable, the firm said. The US Fed has been quantity tightening for a while and has said it will keep rates high longer than previously thought. (Colombo/Jan31/2025)
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