For the first quarter of fiscal year ending June 30, 2014 (Q1FY15), Textured Jersey Lanka PLC (TJL), a division of Brandix Ltd, which is one of the biggest apparel exporters in Sri Lanka, saw its top line declining by 7% year-on-year.
In Q1FY15, TJL witnessed sales falling to Rs 2.7 billion, down 7% from Q1FY14, which it attributed to spill-over effects of temporary slowdown in US demand, due to abnormal weather in the early part of the calendar year.For the first quarter of fiscal year ending June 30, 2014 (Q1FY15), Textured Jersey Lanka PLC (TJL), a division of Brandix Ltd, which is one of the #
As a result of drop in sales and volumes, gross profits too fell to Rs 219 million, while gross margins also took a hit, falling to 8.2% in Q1FY15 from 12.1% in the corresponding quarter of last year.
The cascading effect of the reduced gross profit was felt by operating profit which plunged to Rs 123 million in Q1FY15 compared to Rs 228 million in Q1FY14. This was despite administrative and distribution expenses reducing by 18% year-on-year to Rs. 107 million in Q1FY15.
However, the strong cash generation ability of Textured Jersey enabled it to maintain its near debt free balance sheet with a strong net cash position of Rs 1.86 billion, up 5% from a year earlier.
Owing to lower interest rates and exchange rate fluctuations during the period, net finance income for 1Q FY2014/15 also fell 26% year-on-year to Rs 17.6 million.
TJL said the combination of net finance income and Rs 20.6 million of non-operating income consisting of the technical service fees from Ocean India brought the net profit for the period to Rs 164 million, still 32% lower than the corresponding period of last year.
The drop in volumes had a compounding effect on the bottom line, contributing to a 32% year-on-year drop in net profit to Rs 164 million in Q1FY15.
According to Mr. Bill Lam, Chairman of Textured Jersey, “Demand from the US has already recovered and TJL expects its original performance trajectory to regain momentum in the coming quarters.”
Mr. Lam concluded by stating that with the US demand back on track, combined with the 10-12% capacity additions and the savings from the multi-fuel boiler plant, TJL should be able to regain its growth momentum and continuously add value to the shareholders in the upcoming quarters.
Fibre2fashion News Desk - India
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