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Strong balance sheet gears Teejay for growth despite challenging Q3



9-month revenue grows 84% to Rs 66.8 billion

Net profit for period up 17% to Rs 1.97 billion even with Q3 loss

Teejay Lanka PLC has reported strong revenue growth for the nine months ending 31st December 2022 as well as for the third quarter of the year, but higher domestic costs, increased taxes and a softening of orders in international markets have impacted the Group’s third quarter profits.

In a filing with the Colombo Stock Exchange (CSE), Sri Lanka’s first multinational textile manufacturer said the Group had improved revenue for the nine months by 84% to Rs 66.8 billion and for the third quarter by 38% to Rs 18.15 billion. However, with the underutilisation of its plants due to a softening in its main markets, increases in fixed costs due to expansion, income tax increases and a rise in utility costs, the Group posted a net loss of Rs 365 million for the third quarter.

Despite the challenges of the third quarter, Teejay said it had, as a result of the Group’s exceptional first half performance, ended the nine months with a robust cash balance of Rs 10.4 billion, a nine-month net profit of Rs 1.97 billion and a net assets base of Rs 36.2 billion, representing a net assets value of Rs 50.52 per share, an increase of 90% when compared to the corresponding quarter of the previous financial year.

Noting that a crucial challenge faced by the Group during the quarter was a low order book, an obstacle that is envisioned to remain unchanged for the upcoming two quarters, Teejay Lanka Chairman Ajit Gunewardene disclosed that “The China Plus One strategy acts as a bright prospect for the Textile and Apparel industries, and our timely expansion in India makes Teejay a likely benefactor of the strategy, going forward. Teejay will also continue to explore opportunities for growth by discovering new business and evaluate the potential of capturing new international markets.”

Teejay Lanka CEO Pubudu De Silva explained that Teejay has taken a strategic approach to move into scheduled factory slowdowns for short durations to address the rising overhead costs, and intends to fine-tune this strategy going forward. He added: “The strides made in the Group’s operational excellence journey enabled Teejay to adopt a fresh new efficient model to reduce its breakeven point which peaked during the end of Q3. As a result, the Group is now geared to face the challenges of the upcoming two quarters by implementing a leaner operating model. Despite the volatilities in the market, Teejay remains confident that positives are not entirely absent.”

Teejay Lanka was the first textile manufacturer in Sri Lanka to receive membership of the US Cotton Trust Protocol, and is a public quoted company with 40 per cent public ownership. The company is backed by Sri Lanka’s largest apparel exporter Brandix Lanka which has a 32 per cent stake. Pacific Textiles of Hong Kong, whose key shareholder is the Tokyo Stock Exchange listed Toray Industries Inc., owns 27 per cent of Teejay Lanka.

Teejay Lanka was ranked the No 1 corporate entity among 100 public listed companies in Sri Lanka for Transparency in Corporate Reporting in the TRAC 2022 assessment carried out by Transparency International Sri Lanka (TISL), the local arm of the international corruption watchdog. The TISL assessment was carried out on three areas crucial to fighting and preventing corruption: reporting on anti-corruption programmes, transparency in company holdings and the disclosure of key financial information in domestic operations.

The Company has been adjudged the Best Textile Exporter in Sri Lanka at the Presidential Export Awards presented by the Export Development Board (EDB) and has been named among the 100 Most Respected Companies in Sri Lanka by LMD.

An ISO 9001:2015, ISO 14001:2015 and OHSAS 18001:2007 compliant company and the first in the industry to develop green fabric, Teejay has been listed on the Colombo Stock Exchange (CSE) since 2011 and was included in the S&P Top 20 Index in Sri Lanka. The Company has also been named among the Forbes ‘200 Best under a Billion in Asia’ and been recognised as the ‘International Textile Firm of the Year’ and the ‘International Dyer and Finisher’ by World Textile Institute, London.

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Cargills Bank in ‘steady performance’ over nine months ended September 30, 2023 – PAT Rs. 432 Million



Chairman of the Board Richard Ebell (L) / Managing DIrector/CEO Senarath Bandara (R)

Economic conditions and challenges prevailing last year have moderated somewhat, given the steadfast approach by policy makers and regulatory authorities towards economic recovery. We appreciate their efforts, and our results bear testimony to the progress made. Nevertheless, the road ahead remains challenging. A meaningful government budget, continued success of the IMF program, general price stability and regained momentum in tourism, remittances and exports will be key in shaping the country’s short- to medium- term economic revival, a Cargills Bank press release said.

The release adds: ‘Cargills Bank’s results for the nine months ended 30 September 2023 reflected continuing QoQ improvement in profitability. Profit after tax at Rs. 432 Mn was higher by Rs. 324 Mn than in the corresponding period of 2022. We are pleased the Bank has been able to maintain this momentum of profitability growth, and are confident the results of 2023 will reflect the strong commitment of the Bank’s team, successful execution of its strategy, a continued rigorous focus on market trends and its adaptability to a volatile environment.

‘Net interest income grew 15% or Rs. 353 Mn in the nine months compared with the corresponding period of 2022. The Bank directed its resources towards higher yielding assets, hedging interest rate risk and prudently managing deposits. In addition, close monitoring of the Bank’s lending portfolio and timely solutions offered to financially stressed customers helped maintain a healthy NIM to date.

‘Net fee and commission income of Rs. 590 Mn for the nine months was lower than the Rs. 641 Mn in the previous year. The decrease of 6% related largely to lower trade volumes and reduced net income from card related services. Additionally, capital gains realized on derecognition of financial assets, and higher foreign exchange income boosted other income streams by Rs. 265 Mn, to Rs. 391 Mn in the nine months.

‘Total operating expenses increased 25% from Rs. 1.7 Bn last year to Rs. 2.1 Bn. Personnel expenses increased 15% largely due to adjustments to salary and welfare benefits considering increased costs of living and market conditions. Other operating expenses grew 44% mainly from the impact of the Social Security Contribution Levy which was effective from October 2022, the increased cost of utilities and the cost of repair and maintenance of IT assets, particularly where denominated in foreign currencies.

‘Impairment charges totaling Rs. 607 Mn reflected a reduction of 50% in the first nine months of 2023 evidencing a focused and proactive management of delinquencies and commendable overall team efforts in this direction. The Bank’s Stage 3 Loans (net of Stage 3 Impairment) to Total Loans Ratio stood at 6.64% while Stage 3 Provision Cover was 52.74% at 30th September 2023. Additional impairment overlays considered necessary have been incorporated after a careful scrutiny of the status of borrowers.

‘VAT on Financial Services and income tax expenses increased substantially mainly due to growth in profits and the increased corporate income tax rate effective 1 October 2022.

‘The Bank maintains Capital Adequacy and Liquid Assets Ratios well above the minimum requirements prescribed by the Central Bank. The total Capital Adequacy Ratio was 20.43% while the Statutory Liquid Assets Ratio stood at 37.72%.

‘Total assets of the Bank at 30 September stood at Rs. 64.7 Bn, an increase of 20% or Rs. 11 Bn in the first nine months of the year. Financial Assets measured at fair value through other comprehensive income grew by 92% to reach Rs. 19.6 Bn. Positive gains were reflected in Other Comprehensive Income. The loan book registered moderate growth, from Rs. 36.0 Bn to Rs. 36.8 Bn, given conditions prevailing. In this regard, the Bank exercised care in maintaining the quality of its lending in a high interest rate environment, where interest payments threatened borrowers’ viability. A shift in strategy commenced in the latter part of the period, to rebuild momentum in lending.

‘Deposits to customers grew 20% from Rs. 37.8 Bn at the end of 2022 to Rs. 44.9 Bn at the reporting date amidst continued reductions in market interest rates. The Bank will judiciously balance interest expenditure and income, as substantial reductions in interest rates and the time lag in repricing loans have a direct impact on NIMs.

‘In October 2023, Fitch Ratings affirmed Cargills Bank’s National Long-Term Rating at ‘A(lka)’; Negative Outlook.

‘Ms Ruvini Fernando, who has served as a Director since 1 August 2018, resigned from the Bank’s Board on 27 October 2023 due to personal circumstances. Mr Arjuna Herath has been appointed to the Bank’s Board effective 1 November 2023.

‘The Colombo Stock Exchange (CSE) has approved the listing of the Bank’s shares on the CSE. Steps are being taken to duly offer to the public 62.5 Mn shares of the Bank at Rs. 8.oo per share through an Initial Public Offering.’

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Unilever Sri Lanka celebrates a Decade of Empowering Sri Lanka’s Youth



Empowering the younger generation, Unilever Sri Lanka recently inducted its 10th batch of Unilever ‘SPARKS’ student Ambassadors, welcoming 26 passionate undergraduates from 10 different universities into its impactful and sought-after student ambassadorship programme.

The SPARKS programme seeks to cultivate the leadership skills and innovative spirit of Sri Lankan undergraduates, encouraging them to become positive influencers among their peers. This is a voluntary student ambassadorship programme in which selected undergraduates from various universities are appointed to be ambassadors of Unilever in their respective institutions for a period of 1 year. The programme was launched in 2014 by Unilever Sri Lanka and was subsequently adopted by Unilever entities across the world.

Hajar Alafifi, Chairperson and Managing Director, Unilever Sri Lanka said, “We are looking forward to working with the selected talented youth in this year’s SPARKS programme. The program is a testament to our commitment towards empowering local youth. This year-long programme serves as an ambassadorship, with students acting as liaison between Unilever Sri Lanka and their respective university. The programme is designed to allow students to exhibit their strength as leaders in their institution. The program is highly sought after among undergraduates, with a remarkable 55% of SPARKS ambassadors transitioning to internships or permanent roles within Unilever in recent years. Celebrating its 10th year, this annual endeavor reflects Unilever’s sustainable approach to making a lasting positive impact on the nation’s youth, preparing them to be ‘future fit.’’

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7th Great HR Quiz by CIPM



The Chartered Institute of Personnel Management (CIPM) announces the forthcoming 7th Great HR Quiz, a distinguished event showcasing the expertise of workplace professionals in Human Resources. Scheduled to take place today, at the Hotel Galadari, Colombo, the event is set to commence at 2:00 p.m.

Being a brainchild of Rohitha Amarapala, the past president of CIPM, the Great HR Quiz made its debut in 2014 and has since evolved into a prominent fixture in Sri Lanka’s HR sector. Anticipated to be more significant and more impactful this year, the event is expected to draw the participation of approximately sixty-five esteemed companies.

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