SRI LANKA: Textured Jersey Q1 profit hit by US slowdown
A drop in demand from some of its US customers after abnormal weather in the early part of the year kept shoppers away from stores, has weighed on first-quarter profits at knitted fabric manufacturer Textured Jersey Lanka.
The company, which is one of Sri Lanka's largest producers of weft knit fabric for the intimate apparel and sportswear industries, reported a 32% year-on-year slump in net profit to LKR164m (US$1.26m) in the three months to 30 June, as sales fell 7% to LKR2.7bn (US$20.7m).
However, chairman Bill Lam says this slowdown was just temporary, and that demand from the US has already recovered. He also notes the company is back on track, thanks to a capacity expansion of 10-12% and savings from a multi-fuel boiler plant.
"TJL should be able to regain its growth momentum and continuously add value to the shareholders in the upcoming quarters," a statement said.
During the first quarter gross profit came in at LKR219m, representing a margin of 8.2%, compared to 12.1% in the corresponding quarter of last year.
The cascading effect of the reduced gross profit resulted in operating profit for the quarter falling to LKR123m from LKR228m last time, despite administrative and distribution expenses reducing by 18% year-on-year to LKR107m.
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