Teejay Lanka 4Q profits propelled by stable yarn prices and favourable product mix

Teejay Lanka PLC, the knit fabric maker for the global apparel makers reported some solid top and bottom-line performance for the three months ended in March 2025 while the broadly stable yarn prices, the company’s key raw material, helped the company to report higher profits.

Releasing its interim results, the company reported revenues of Rs.17.25 billion for the January – March quarter, the company’s fourth fiscal quarter, up 13 percent from the same period in 2024.

The company attributed this to the favourable sales mix and increase in demand.

This, they said, was achieved amid the challenges in the market and the appreciation in the Rupee against the Dollar in the first three months of 2025.

Despite the challenges, the company sounded upbeat about its future prospects.

“At the same time, it is notable that the global shift in order flows towards Asia, encouraged by the China plus one strategy, is opening up new opportunities to leverage strategic presence in Sri Lanka and India”, the company said while referring to its facilities in both Sri Lanka and India.

“Despite the volatility in the market, Teejay will continue to explore opportunities for growth by discovering new business and evaluating the potential of capturing new international markets”, the company further said.

The company and the rest of the textiles and garment makers in Sri Lanka had a narrow shave in April when the hefty 44 percent reciprocal tariffs imposed by the United States were brought down to 10.0 percent for 90 days until a deal is reached between the two countries over how Sri Lanka could address the substantially unfavourable trade balance the US has with Sri Lanka.

Out of the roughly US$ 3.00 billion worth of exports to the US annually from Sri Lanka, up to 65 percent consists of textiles and garments.

The company meanwhile saw the continued stability in yarn prices and the favourable product mix helping its overall profitability. For instance the direct costs declined by 7 percent on year to Rs.14.77 billion for the quarter.

In this backdrop, the company’s gross profit rose by 65 percent to Rs.2.48 billion for the three months from a year ago while the operating profit rose by 125 percent on year to Rs.1.46 billion.

Meanwhile, the net finance cost fell sharply by 65 percent to Rs.90.39 million from a year ago on both retirement of part of their debt as well as the decline in borrowing costs on Rupee borrowings.