Sri Lanka's Teejay Lanka net down 40-pct on cotton spike; GSP+ to help growth
May 17, 2017 17:15 PM GMT+0530 | 0 Comment(s)
ECONOMYNEXT - Sri Lanka-based Teejay Lanka Plc, an export fabric maker reported profits of 493 million rupees for the March 2017 quarter, down 40 percent from a year earlier on spiking cotton prices, but said restored free trade access to Europe will help future growth.
The firm reported earnings of 71 cents per share. For the year to March, it reported earnings of 2.80 rupees on total profits of 1.95 billion rupees, which fell 10 percent.
Revenues grew 6 percent to 5.79 billion rupees in March quarter and cost of sales grew at a faster 17 percent to 5.1 billion rupees, shrinking gross profits 40 percent to 656 million rupees.
Cotton yarn prices soared 20 percent over the past 12 months the firm said, with margins squeezed 39 percent in the last quarter. The firm is expecting prices to stabilize in the short term.
Chief Executive Sriyan de Silva Wijeyeratne said the firm is investing 15 million dollars in capacity expansion in India which will come on stream during the second quarter.
Future growth was also expected from GSP+ free trade benefits to the EU.
"Cotton price volatility is expected to ease out by around the end of Q2, and at this point we welcome the latest news currently coming in on the GSP," de Silva Wijeyeratne
"The company is cautiously optimistic on its expansions in India and its new ventures into Synthetics, which has so far met with good customer response."