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Sri Lanka knit fabric maker's profits surge on stronger margins
08 Feb, 2013 06:52:24
Feb 08, 2013 (LBO) - Textured Jersey Lanka Plc, a unit of Sri Lanka's Brandix apparel group and Hong Kong based Pacific Textured Jersey said profits rose 94 percent to 364 million rupees in the December 2012 quarter from a year earlier.
The firm reported profits of 56 cents per share for the quarter. For the 9 months to December 2012 the company reported earnings of 1.06 rupees on profits of 693 million rupees up 69 percent from a year earlier.

In the December 2012 quarter revenues fell 7.0 percent to 2.8 billion rupees but cost of sales fell at a faster 11 percent to 2.39 billion rupees allowing the firm to grow gross profits 25 percent to 460 million rupees.

The stock closed at 9.10 rupees, up 10 cents Thursday. The company had declared an interim dividend of 66 cents per share.

Chairman Bill Lam told shareholders in a stock exchange filing that volumes grew while raw material prices fell, allowing profits to grow despite total revenues edging down.

"Higher volumes, combined with industry-leading production efficiencies, lower yarn costs and the depreciation of the Sri Lankan rupee, caused a substantial increase in TJL’s gross profit margins...," Lam said.

The company said order book was encouraging with continued interest from top clients including Victoria’s Secret, Marks & Spencer, Intimissimi and Decathlon, which would help the firm to maintain sales volumes in the next quarter.

Textured Jersey's cash reserves rose to 2.0 billion rupees, with profits and working capital requirements also shrinking. The company said it had paid down long term loans.

"On strategic initiatives, the construction phase of TJL’s multi-fuel boiler plant commenced during the quarter," Lam said.

"TJL’s expansion strategy is also moving forward according to schedule.

"Given the positive outcome thus far, TJL’s management remains confident that the company will continue to enhance shareholder value and deliver strong results in the coming quarter and end the financial year on an impressive note."

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