Teejay Lanka delivered exceptional financial performance for 2024/25, which marks a significant turnaround against the previous year’s subdued performance. This year’s success has been multiple years in the making. It demonstrates Teejay’s excellent foundational positioning to capture market opportunities, deep resilience to weather economic headwinds, strong capabilities to compete in an advanced and highly technical industry, and strategic foresight to capitalise on future opportunities.

We delivered robust revenue growth of almost 10% year-on-year, supported by the stabilisation of yarn prices that had fluctuated significantly in previous periods. Our strategic focus on scaling synthetic manufacturing and product diversification yielded positive outcomes as we saw a sustained growth.

Our disciplined focus on operational efficiency and cost management supported a remarkable surge in the Group’s profitability. Profit Before Tax (PBT) soared by nearly 160% to surpass LKR 4.0 Bn., and Profit After Tax (PAT) rose by 152% to LKR 2.79 Bn. We also achieved a record-breaking gross profit of LKR 7.8 Bn., reflecting 55% growth year-on-year, with our gross profit margin returning to a 5-year high of 12%. operating profit similarly reached a record LKR 4.56 Bn., up 106%, reflecting effective utilisation of production capacity, stringent cost-controls, and the initial benefits of an expanded multi-location strategy and footprint.

These results are a testament to our prudent capital allocation, leading to significant improvements in Return on Assets (ROA) to 5%, Return on Equity (ROE) to 9%, and Return on Capital Employed (ROCE) to 11.6%. Our strategic investments, including the installation of a number of new knitting, finishing, and dyeing machines; not only expanded existing capacity but also introduced capabilities in brand-new fabrics and finishes that sets us up strongly for the future.

Going into the new financial year, our financial position remains exceptionally strong. While cash and cash equivalents saw a planned reduction of 23% to LKR 5.58 Bn. due to strategic debt repayments and capital expenditure, our liquidity ratios remain robust. We successfully reduced our total debt to LKR 7.5 Bn., and strengthened our interest cover ratio to 5.10. We closed out the year with a gearing ratio below 25%, signifying a healthy and stable financial footing for future growth.

The growth in EPS, market value per share, and dividends per share reflects the company’s solid financial position and upward growth trajectory. The increase in the dividend payout ratio underscores the company’s dedication to delivering value to shareholders, further strengthening investor confidence. Looking ahead, the company is well-equipped to sustain its growth and generate substantial returns for its stakeholders.

Adopting good governance practices enhances operational efficiency, improves transparency, and strengthens risk management. It supports informed decision-making through due diligence and ensures regulatory compliance, reducing legal risks and protecting the Company’s reputation.

Gaining independent assurance from external auditors on the financial statements, Integrated Reporting Framework (IIRC), and GRI disclosures will further reinforce trust in the reporting standards

Renuja Selvanathan
Chief Financial Officer,
Teejay Lanka PLC

 

Approach to Financial Capital Management

Our commitment to responsible financial capital management and value creation for shareholders is rooted in fostering future gains and long-term value, prioritising sustainable growth over short-term rewards. This is clear in our strategic approach, which emphasises long-range planning, mitigates ESG risks, and prioritises sustainability while driving business growth.

We maintain profitability through innovation and transformation, practice responsible and robust governance, and are actively working towards market leadership in our field.

Our commitment is built on our efforts to efficiently allocate funds, striving for operational excellence through agility, adaptability, and transformation. We prudently invest funds to ensure effective risk management, provide for long-term value creation, enhance capabilities, incorporate new technologies, and practice sound corporate governance, environmental stewardship, and social responsibility.

Agility and Adaptability through Transformation: We focus on modernisation; incorporating cutting-edge technological advancements, continuously improving our product and systems. The transformation journey that we have embarked on includes market, product, operational excellence, people and systems, leveraging digitalisation; to streamline operations, enhance decision-making, and ultimately maximise shareholder value.

Delivering Sustainable Value: By prioritising key growth drivers and sustainable business practices, we aim to provide high returns that consistently outperform market rates.

Ethical Business Practice: We uphold the highest standards of corporate governance, ensuring transparency and accountability in our decision-making, coupled with a robust enterprise-wide risk management framework. These practices contribute to the long-term business sustainability.

Environmental and Social Responsibility: While minimising our environmental footprint and continuously investing in our workforce and communities, we recognise the growing importance of a broader sustainability imperative in the textile industry. We continue to lead the field with enhanced reporting standards, robust analysis of Sustainability-Related Risks and Opportunities (SRROs), and ongoing efforts to assess the potential financial impacts of climate change and incorporate them into financial planning and reporting.

We understand that impacts from our business operations, alongside dependencies on environmental and social resources, create SRROs for the Group. Therefore, we have taken steps to integrate our sustainability efforts of impact management and mitigation with the management of these SRROs through the Group’s Risk Management function.

By integrating ESG considerations into our risk assessments and decision-making, we aim to mitigate potential sustainability-related risks and seize opportunities for long-term value creation. This alignment ensures our business operations are not only resilient but also sustainable, fostering stakeholder trust and enhancing our competitive advantage.

Our commitment to sustainability is further evidenced by our approach to double materiality and our standard of sustainability disclosure, which take into account the requirements of IFRS S1 and S2.

Investor Value Snapshot

Our commitment to delivering exceptional shareholder value is rooted in solid results and strategic financial stewardship. Our strong performance across a spectrum of indicators in 2024/25 provides a compelling investor proposition with exceptional value creation potential through sustained growth.

ECONOMIC VALUE ADDED STATEMENT

	2024/25				2023/24
	Group LKR Mn.	%	Company LKR Mn.	%	Group LKR Mn.	%	Company LKR Mn.	%
Revenue from contracts with customers	67,036		38,895		60,734		38,579
Finance income	390		353		455		501
Other income	526		120		203		103
Economic value generated (EVG)	67,953		39,369		61,392		39,183
Distributed as follows;
Cost of production and other OH	(54,001)		(31,365)		(49,723)		(30,799)
Value added by operating activities	13,953		8,004		11,669		8,384
Employees: Salaries, wages and other benefits	6,149	44	3,333	42	5,451	47	2,963	35.3
Government: taxes	981	7	962	12	896	8	869	10.4
Lenders of Capital: Interest	894	6	190	2	1,096	9	337	4.0
Community investments	16	0	16.15	0	12	0	12	0.1
Shareholder: Dividends	1,082	8	1,082	14	538	5	538	6.4
Economic value retained within business
Depreciation	3,120	22	1,441	18	3,105	27	1,445	17.2
Gross value retained	1,711	12	979	12	572	5	2,222	26.5
Total distribution	13,953		8,004		11,669	100	8,384	100

REVENUE

Group revenue grew by almost 10% YoY, supported by volume growth, product mix, customer mix. Yarn prices that surged in 2022/23 due to post-pandemic aftereffects and geopolitical supply chain instabilities, have now largely stabilised. Similarly, macroeconomic pressures that held sway in the previous year showed signs of abatement as the market signalled a positive swing in Q2 and sustained this momentum into the latter half of 2024/25.

Teejay’s long-term strategic focus on expanding synthetic manufacturing capabilities and diversifying its product portfolio continued to deliver strong results. We achieved consistent growth in the higher-margin synthetic segment and generated revenue from newly developed products. These positive outcomes were driven by optimising our product and customer mix, prioritising customer-centric innovation and development, building relationships with new clients, and expanding our geographic footprint.

While the Group achieved sales and revenue growth during the year, erosion of consumer purchasing power and persistent inflation in some of our primary markets contributed to continuous price-pressure from customers; resulting in reductions to Average Selling Price (ASP). Similarly, the effects of Rupee-appreciation against the USD during the year, resulting in translation and transaction losses, had a negative effect on our overall revenue performance

With a stable revenue base exceeding LKR 17 Bn. over the past three quarters, Teejay is well-positioned to pursue margin enhancement, further diversification, and increased investment in R&D and innovation-particularly within the value-added product segment as we move into FY 2025/26.

We successfully executed a number of active measures that capitalised on conducive market conditions, allowing for improvement in the Group’s sales-mix and profitability in 2024/25. The transformation journey we've embarked on has significantly influenced our cost structure across all aspects, including raw materials and capacity utilisation. Strategic business optimisations in inventory management, capacity utilisation, and operational efficiency have led to overall cost benefits. Additionally, a shift in product mix toward more profitable segments has further contributed to enhances in profitability during the year.

Profitability metrics surged to record highs in 2024/25, reversing the previous year’s decline and regaining the Group’s positive trajectory. Profit Before Tax (PBT) grew by almost 160% to surpass LKR 4.0 Bn., and Profit After Tax (PAT) rose by 151% to reach LKR 2.79 Bn.

Gross profit

The Group achieved a remarkable gross profit of LKR 7.8 Bn., reflecting 53% growth year-on-year. This is a very strong performance for the Group, achieved through effective utilisation of production capacity and supported by stabilised yarn prices. We also achieved a gross profit margin of 12%, the highest level in five years. reflecting the impact of operational efficiency measures, successful cost-management, product transformation and product development strategies.

Our strategic focus on pursuing operational excellence played a role in reducing wastage, increasing overall efficiency, and achieving significant cost reductions through execution of critical projects. Similarly, our extended multinational presence and increased capacity utilisation allowed the Group to successfully leverage economies of scale, and achieve efficiency improvements that helped control production costs. Beneficial electricity tariff reductions in Sri Lanka, and steadying of industrial electricity rates in India, also contributed to driving down operational costs across the Group.

Operating expenses

Administration and distribution expenses rose in line with revenue growth, driven by higher sales volumes, increased distribution costs, and greater investments in branding, promotional initiatives, market development, and the expansion of operational activities. Similarly, IT-related software expenses grew alongside the scaling of core business functions aimed at enhancing operational efficiency. The Group also encountered challenges due to the appreciation of the Rupee against the US Dollar and an increase in LKR-denominated expenditures , nevertheless the impact stemming from Indian Rupees (INR) negated the depreciation overall impact.

Despite these rising expenses, the Group’s operating ratio (operating costs as a percentage of revenue) held steady at 5%. An achievement that was aided by reduced fuel cost costs and levelling out of domestic expenses as inflation slowed down and Sri Lanka’s economy stabilised post-crisis.

Operating profit

The Group reported strong growth in operating profit, reaching a record high of LKR 4.56 Bn., up 105% from LKR 2.21 Bn. the previous year. Our operating profit margin, accordingly, regained ground to reach 7% – nearing pre-economic crisis levels. The Group’s net profit, or profit after tax, also grew by 151% to reach LKR 2.79 Bn. in 2024/25.

Tax Expense and Strategy

Income Tax Expense increased to LKR 1.25 Bn., commensurate with revenue growth posted during the year under review.

Tax Strategy for Sri Lanka

Teejay Lanka PLC’s tax planning encompasses meticulous calculation and preparation of tax returns, covering Corporate Tax, VAT, SVAT, WHT, Stamp Duty, and other revenue taxes; ensuring strict adherence to legislative requirements and timely submission well before due dates. To enhance compliance and efficiency, we seek advice from experienced tax specialists, guaranteeing alignment with specific tax laws in our areas of operation.

Additionally, the Company estimates monthly taxes based on business performance, providing vital support to the treasury function. The Management is kept informed of any changes in Tax Laws, enabling them to make well-informed decisions in line with the Group’s overall business strategy. As part of our tax strategy and commitment to compliance, we collaborate closely with industry associations such as the Fabric and Apparel Accessory Manufacturing Association (FAAMA) and the Joint Apparel Association Forum Sri Lanka (JAAFSL).

Tax Strategy for India

Teejay India (Private) Limited’s tax planning encompasses meticulous calculation and preparation of tax returns, covering Corporate Tax, IGST, Customs, Stamp Duty, SEZ Act and other revenue taxes; ensuring strict adherence to legislative requirements and timely submission well before due dates. To further enhance compliance and efficiency, the Company seeks advice from experienced tax specialists, guaranteeing alignment with India’s tax laws. Additionally, the Company estimates monthly taxes based on business performance.

Financial position

The resilience of our financial position was buoyed by the Group’s exceptional operational performance in 2024/25, reflected in strengthening of our balance sheet and improvement across a number of financial health metrics.

Our Total Assets grew marginally to LKR 56 Bn. while Total Debt reduced to LKR 7.5 Bn. Strong cashflow generated by our core business continues to provide a robust foundation for the Group’s financial position.

Interest costs continued to decline year-on-year, due to supportive monetary policies and resultant rate reductions; while boosted operating profits contributed to improvement of solvency and strengthening of our interest cover ratio to 5.10. When considered alongside our reduction in Total Debt, this provides Teejay a strong position from which to make strategic decisions for future growth.

Capital Efficiency

Strong performance during the year, buoyed by supportive policy measures, high capacity utilisation, and improved order volumes contributed to a significant improvement to the Group’s ratios.

Teejay Lanka PLC had initially benefited from 14% Income Tax until 30 Sep 2022, thereafter the Corporate Tax rate was increase to 30%. Despite this, we continued to prudently allocate resources, manage asset utilisation, and leverage financial capacity to maximise the productivity of our capital base.

Return on Assets (ROA) and Return on Equity (ROE) ratios saw improvements in 2024/25, to 5% and 9% respectively. Return on Capital Employed (ROCE) also strengthened significantly to 12% from 5% the previous year.

Liquidity

Cash and cash equivalent increase by 8% during the year under review to reach LKR 9.6 Bn. Strong operating cash flow was made possible through efficient management of working capital despite appreciation of the Sri Lankan Rupee.

Demonstrating stable operational liquidity and efficient management of working capital and treasury functions, the Group’s current ratio remained robust, finishing 2024/25 at a healthy 1.94, up from 1.88 in the previous year. Likewise, the quick ratio exhibited a positive upward trend, reaching a 5-year high of 1.3 by year-end.

Leverage

Our gearing ratio, also known as the debt-to-equity (D/E) ratio, maintained its stable trend from 2022, with no significant new borrowings during the year. We closed the 2024/25 period with a gearing ratio below 19%, reflecting a healthy and stable financial position achieved through timely debt repayments, effective capital allocation, and strong treasury management initiatives. With consistent cash inflows, Teejay is well-positioned to support future growth.

Cashflow Management

Investor Value Creation

Exceptional financial results and strong performance across a host of investor metrics, coupled with the Group’s forward-thinking multi-location strategy, has strengthened our long-term value proposition for investors.

• We prioritised market growth by effectively leveraging the macro economic opportunities – enhancing our customer base by nurturing relationships with new and existing clients, and strengthening our supply chain agility and diversification with a growing presence in key regions like Egypt, Bangladesh, and Indonesia.
• Our focus on profitability growth saw refinement of Teejay’s product portfolio, encompassing cotton, synthetics, prints, fleece, and jacquards, in order to cater to a broader spectrum of market demands. Investments in product innovation and R&D through INSCOPE continue to uplift our product capabilities and support diversification of our product mix.
• A strong emphasis on sustainability not only aligns our efforts with global expectations but also provides a competitive edge in terms of quality, cost, and complexity compared to other fabric manufacturers.
• We reinforced our foundational risk mitigation framework, ERM strategies, and governance structure; and improved incorporation of digitalisation through our operations and business processes.

We are working with external consultants and experts to identify, analyse, and incorporate within our risk register; the specific physical and transition risks related to climate change such as extreme weather events and potential carbon pricing regulations. These risks are also being assessed using internal scenario analysis to understand their potential financial implications. In order to suitably address these risks, we employ a number of strategies including business continuity planning, risk mitigation measures such as investing in insurance and physical protection for buildings and equipment, and informing our investment decisions based on both financial and environmental factors. In meeting our commitment to shareholders, for transparent and accurate financial reporting, we are working to align with the International Financial Reporting Standards (IFRS) S1 and S2 guidance.

Being among the market capitalisation leaders listed on the Colombo Stock Exchange, Teejay commenced reporting under IFRS S1 and S2 from the 2024 financial year, following the launch of this initiative last year and obtain assurance from the 3rd party.

We believe that aligning with these standards will enhance the objectivity, consistency, and comparability of our disclosures, offering shareholders a more comprehensive and contextual understanding of our performance and future outlook.

Financial implications of managing our sustainability related risks and opportunities

Impact topic	Sustainability related risk and opportunity	Commitments, governance and strategy	Mitigation activities	Page number	Financial impact of strategy and mitigation activities
Climate Change	Physical Risks of Climate Change Risks to operations arising from natural disasters and increased severity of extreme weather conditions such as floods – acute/event driven. In the longer run reduction in river water level due to drought and rising water cost – chronic.	Build climate resilience by adapting operations to a changing climate and severe weather patterns. Striving to build robust and multiple supply chain options. Implement strategies to reduce overall water consumption and minimise the use of groundwater sources.	Disaster Recovery Plans, BCPs put in place, drills and relevant insurance covers obtained. Implement water conservation strategies within manufacturing processes to enhance efficiency and sustainability. Engage in reforestation initiatives to restore ecological balance and enhance carbon sequestration.	Environment Stewardship	Insurance premium for natural perils is LKR 51 Mn. LKR 0.1 Mn. invested for Fire Drills and Training. LKR 1.5 Mn. maintenance of Fire protection system and Fire Fighting equipment.
	Transition Risks of Climate Change Risks arising to operations in its efforts to transition to a low carbon operation.	Transitioning to a low-carbon business model through investment in suitable and appropriate technology and R&D efforts within manufacturing operations. Investment in Renewable energy projects considering both impact investing and financial payback. Phasing off non-renewable energy sources and shifting to national grid and renewable energy.	Investment in Renewable energy projects and promote the adoption of renewable energy technologies. SBTi Commitments. Write-offs and early retirement of existing assets due to regulatory/ voluntary commitments and policy changes. Phasing out non-renewable energy sources. Investments made in Energy Audits, Energy efficient equipment.	Environment Stewardship	LKR 2 Mn. invested in tree plantation projects named “To Earth with Love Biodiversity Projects” LKR 4 Mn. invested for energy audit LKR 26 Mn. invested for Low Carbon Fuel LKR 7 Mn. invested for GHG Emission Analysis. LKR 776 Mn. is planning invest on renewable sources/Sustainable bio mas for energy generation in 2025/26 LKR 9 Mn. invested for Utility Monitoring Mechanism
Energy Usage	Increased energy consumption and costs. Abrupt and unexpected shifts in energy costs.	Enhance equipment energy efficiency through strategic investments and sustainable procurement practices that prioritise financial viability, energy conservation, and emission reduction.	Investment in renewable energy sources Implementation of energy-saving technologies across operations. Promotion of energy conservation practices among employees.	Environment Stewardship	LKR 792 Mn is planning to invest on renewable PV Solar Project. LKR 4 Mn. invested on IREC Purchase – 8,000 Mwh LKR 12 Mn. invested for LED lights installation.
Effluent Discharge	Risks of poor-quality effluent discharge	Enhance effluent treatment efficacy through Effluent Treatment plants, conducting continuous monitoring of discharge parameters, and ensuring compliance with environmental standards.	Investments in upgrading of Effluent Treatment plants, staff training on monitoring, risk audits, ensuring spare parts are maintained onsite for critical ETP parts	Environment Stewardship	LKR 8.3 Mn. invested on Matter Microfiber Elimination Project. Investment made for water treatment and recycling system modification for LKR 2 Mn. LKR 2 Mn. invested for Water Online Monitoring System. LKR 0.4 Mn. paid for water audit and assessment. LKR 0.2 Mn. invested in IREA LAB Accreditation. LKR 1,347 Mn. invested on machineries and LKR 49 Mn. invested on ETP Clarifier.
Waste Management	Risk of environmental pollution and regulatory penalties resulting from excessive waste generation and improper disposal practices.	Implement comprehensive waste minimisation strategies and ensure consistent waste segregation practices across the Group. Promote responsible waste management and segregation.	Establish and implement waste reduction and segregation programs. Focused on waste reduction process routes in production.	Environment Stewardship	LKR 155 Mn. incurred for Sludge, solid space required waste, bottom ash and chemical disposal. LKR 5.5 Mn. invested on sludge dryer modification. Investment made for circular economy initiative value enhancement of waste of LKR 1.5 Mn. Investment made for modification of waste storage location of LKR 18 Mn. Incurred LKR 0.6 Mn. for waste disposal activities under the waste to wealth.
Occupational Health and safety	Employee injuries and illnesses leading to decreased productivity and potential legal expenses.	Foster a safe and healthy work environment by implementing a comprehensive Health and Safety Management System (HSMS), establishing effective monitoring mechanisms, providing regular staff training, and ensuring the availability and use of appropriate Personal Protective Equipment (PPE).	Conduct employee safety training programs (hazard identification, safe work procedures). Investments made in PPE for staff. Implementation of a robust safety management system with regular inspections and incident reporting. Regularly conducts safety audits and risk assessments.	Our People	Conducted LKR 1 Mn. Employee Safety Training Programs. Investment made for PPE’s for Staff worth of LKR 19.4 Mn. Implemented safety management system worth of LKR 15 Mn for activities, maintenance and consumables. Conducted safety audits, assessments, and certification programs totaling LKR 12 Mn.
Staff Training and Retention	High employee turnover resulting in the loss of valuable knowledge and expertise	Attract, develop, and retain top talent by implementing structured job rotation programs, targeted progression planning, and succession planning for key employees, complemented by specialised training initiatives tailored to focused employee groups	Offer competitive compensation and benefits packages. Provide ongoing skills development opportunities (e.g., training programs, mentorship programs). Foster a positive and inclusive work environment with strong employer branding and employee engagement initiatives. The second intake of the Teejay Management Trainee Program commenced in June 2024. Identification of critical employees and development of succession plan.	Our People	LKR 30.6 Mn. Invested for staff training and mentorship program during the financial year. LKR 1.6 Mn. paid by the company for professional memberships and affiliations on behalf of employees. Allocated LKR 0.6 Mn. for continuous professional development training for staff. LKR 0.2 Mn. paid for leadership coaching. LKR 1.5 Mn. has been allocated for employee educational loans. Allocated of LKR 33 Mn. has been made for the annual excursion. LKR 85 Mn. has been allocated for Long Service Awards, recognising the dedication and contributions of employees.
Business Ethics and Governance	Risks of corruption, discrimination, and data security breaches	Uphold the highest ethical standards and ensure robust governance practices through a zero-tolerance policy for misconduct, cascading accountability across all organisational levels. Implement a transparent whistleblower procedure supported by an active Whistleblower Committee to foster a culture of integrity and compliance. Strong cyber security framework	A comprehensive anti-corruption policy that includes clear reporting procedures and mechanisms in placed. A comprehensive whistleblowing policy, workplace anti abuse & harassment policy in placed and promptly investigate reported concerns. Investments in data security infrastructure (e.g firewalls, encryption) and employee training on cyber security best practices and personal data protection act No 9 of 2022. Appointment of Data Protection Officer (DPO).	Corporate Governance	Awareness session for LKR 0.1 Mn. for Anti-Corruption and whistleblowing workshop. LKR 10 Mn. annual subscription paid for advanced Firewall and encryption services. LKR 5 Mn. allocated for cutting-edge Advanced Email protection. LKR 7.7 Mn. incurred for Endpoint Security Anti Virus protection. LKR 7 Mn. paid for Secure Access Service Edge (SASE). Employee Training for LKR 0.4 Mn. for employee awareness of cyber threats
Gender diversity and non- discrimination	Non-diverse workforce resulting in inability to attract talent and meet customer requirements on gender diversity	Established clear Harassment Prevention Mechanisms Promote Women in Leadership	Develop and enforce an Abuse & Harassment Free Workplace Policy for the group. Encourage and support women in taking on leadership roles through mentorship and training programs (SheCan programme & Sheleads training series)	Our People	LKR 3.5 Mn. invested for gender diversity initiatives.

		Group
	Metric	2025	2024
P/E ratio	No. of times	13.2	24.3
Price to book value	No. of times	1.17	0.89
Return on equity (ROE)	%	9	4
Earnings Yield	%	7.6	4.1
Operating profit margin	%	6.8	3.6
Return on assets (ROA)	%	5.0	1.9
Interest cover	No. of times	5.1	2.0
Dividend yield	%	5	2.0
Dividend payout	%	61	48.4
Dividend cover	No. of times	1.6	2.1

Investor Relations

Teejay is committed to building strong relationships with its shareholder community; prioritising timely, accurate, and transparent information about our financial and operational performance, strategic initiatives, and future prospects.

Any material or price-sensitive information is promptly identified and reported to shareholders through the Colombo Stock Exchange (CSE). Our Annual General Meetings (AGMs) and any Extraordinary General Meetings (EGMs) serve as the primary platforms for open communication and dialogue with shareholders. We encourage shareholders to exercise their voting rights and welcome their views, comments, and suggestions. Additionally, quarterly earnings calls and specially prepared investor presentations ensure continuous communication, keeping shareholders well-informed. We also actively respond to investor inquiries and address shareholder concerns in a responsible and transparent manner.

CAPITAL MARKET PERFORMANCE

Future Outlook

Looking ahead, Teejay Lanka PLC is strategically positioned for sustained growth and enhanced value creation, given a conducive operating landscape with a resurgent economic and political environment in Sri Lanka, stabilising of the global economy, improved international tariff systems, and increasing customer confidence. However, ongoing geopolitical tension, continuance of out-migratory pressures on Sri Lanka’s capital market, taxation issues related to deemed exports, and other potential issues would exert a negative effect on our financial outlook.

We are well set to take advantage of market opportunities through our proactive strategy, which focuses on market expansion through new customer relationships and expansion of our footprint into regions like Egypt, Indonesia, and Bangladesh to leverage a China+1 shift to other supplier regions. The Group has already found success in optimising a multinational presence to take advantage of economies of scale, enhance cost efficiencies through operational excellence, and implement waste reduction other and business-critical projects.

Innovation remains central to our strategy as we plan significant investments to expand synthetic capabilities and uplift our product portfolio with advanced fleece, jacquard fabrics, and finer gauges. We expect our customer-focused innovation channel – including initiatives like the Digital Fabric Library and deeper capabilities in novel fabrics and smart textiles, unlocked through R&D, to drive market leadership. Newly implemented strategies for digitalising our warehousing function, optimising capacity, and identification of optimum loading capacities, hold immense promise to increase efficiency and further reduce operational costs.

Investing in our people and capabilities remains a key priority as we look to the future. As we expand our presence in Bangladesh, Indonesia and Egypt, we are also introducing more flexible work arrangements and enhancing system connectivity through unified platforms to enrich the overall employee experience

Our strategic journey is integrated with a commitment to sustainable manufacturing, as we phase out fossil-fuel sources and accelerate investments in solar power infrastructure and set ambitious climate and environmental-management targets.

The next few years would also see Teejay continue to scale up digitalisation integration across our operations, including with sound business-cases for AI, IoT, and data analytics. With investments made in 2024/25, including a newly improved ERP system, we expect these improvements to enhance efficiency, unlock additional advantages in manufacturing, and ensure our long-term resilience and competitiveness.

We are exploring strong customer engagement through e-commerce platforms, and working to improve vendor partnering across the supply chain. These ventures, and onboarding of other advanced technologies such as 3D-modeling and immersive user-customisation and integration promise to upgrading our customer-experience offering as we directly involve them in our processes – from product conception to delivery.

Vertical Analysis of Income Statement – Group

	2025		2024		2023
Income Statement	LKR ’000	%	LKR ’000	%	LKR ’000	%
Revenue	67,036,057	100	60,733,952	100	84,037,126	100
Cost of sales	(59,195,423)	(88)	(55,677,311)	(92)	(77,194,229)	(92)
Gross profit	7,840,634	12	5,056,641	8	6,842,897	8
Other net income	526,697	1	203,167	0	531,632	1
Distribution expenses	(571,350)	(1)	(579,776)	(1)	(610,340)	(1)
Administrative expenses	(2,986,828)	(4)	(2,589,737)	(4)	(3,185,376)	(4)
Net impairment reversal/(provision) on financial assets	(258,549)	0	122,903	0	(283,737)	0
Operating profit	4,550,604	7	2,213,198	4	3,295,076	4
Net finance income	(503,230)	(1)	(640,819)	(1)	(178,602)	0
Profit before taxation	4,047,374	6	1,572,379	3	3,116,474	4
Current taxation	(1,254,353)	(2)	(462,843)	(1)	(989,743)	(1)
Profit after taxation	2,793,021	4	1,109,536	2	2,126,731	3

Horizontal Analysis of Income Statement – Group

	2025		2024		2023
Income Statement	LKR ’000	%	LKR ’000	%	LKR ’000	%
Revenue	67,036,057	10	60,733,952	(28)	84,037,126	–
Cost of sales	(59,195,423)	6	(55,677,311)	(28)	(77,194,229)	–
Gross profit	7,840,634	55	5,056,641	(26)	6,842,897	–
Other income net	526,697	159	203,167	(62)	531,632	–
Distribution expenses	(571,350)	(1)	(579,776)	(5)	(610,340)	–
Administrative expenses	(2,986,828)	15	(2,589,737)	(19)	(3,185,376)	–
Net impairment reversal/(provision) on financial assets	(258,549)	(310)	122,903	(143)	(283,737)	–
Operating profit	4,550,604	106	2,213,198	(33)	3,295,076	–
Net finance income	(503,230)	(21)	(640,819)	259	(178,602)	–
Profit before taxation	4,047,374	157	1,572,379	(50)	3,116,474	–
Current taxation	(1,254,353)	171	(462,843)	(53)	(989,743)	–
Profit after taxation	2,793,021	152	1,109,536	(48)	2,126,731	–

Vertical Analysis of Statement of Financial Position – Group

	2025		2024		2023
	LKR ’000	%	LKR ’000	%	LKR ’000	%
ASSETS
Non-current assets
Property, plant and equipment	17,270,048	31	18,142,428	33	20,258,577	34
Right-of-use assets	1,575,062	3	1,681,152	3	1,740,026	3
Deferred tax assets	1,947,104	3	2,239,540	4	1,856,016	3
Other non-current assets	1,476,202	3	2,033,857	4	2,103,132	4
Total non-current assets	22,268,416	40	24,096,977	44	25,957,751	43
Current assets
Inventories	11,332,129	20	11,645,818	21	13,382,977	22
Trade and other receivables	11,920,512	21	9,773,644	18	9,025,553	15
Current tax receivables	730,058	1	614,466	1	496,702	1
Other financial assets	4,019,419	7	1,668,451	3	3,281,426	5
Cash and cash equivalents	5,584,038	10	7,233,344	13	7,913,808	13
Total current assets	33,586,156	60	30,935,723	56	34,100,466	57
Total assets	55,854,572	100	55,032,700	100	60,058,217	100
Equity
Capital and reserves
Stated capital	4,582,871	8	4,442,234	8	4,442,234	7
Exchange equalisation reserve	15,393,591	28	15,752,202	29	18,047,539	30
Share option scheme	186,667	0	181,691	0	153,491	0
Retained earnings	11,366,369	20	9,754,037	18	9,400,088	16
Total equity	31,529,498	56	30,130,164	55	32,043,352	53

	2025		2024		2023
	LKR ’000	%	LKR ’000	%	LKR ’000	%
LIABILITIES
Non-current liabilities
Borrowings	2,531,225	5	4,139,942	8	6,238,676	10
Lease liabilities	1,222,829	2	1,229,391	2	1,340,989	2
Deferred tax liabilities	2,150,800	4	2,213,454	4	2,363,673	4
Retirement benefit obligations	1,122,028	2	875,378	2	568,559	1
Total non-current liabilities	7,026,882	13	8,458,165	15	10,511,897	18
Current liabilities
Trade and other payables	12,064,278	22	10,866,322	20	10,555,776	18
Current tax liabilities	212,640	0	281,655	1	489,789	1
Borrowings	4,940,980	9	5,183,782	9	6,343,276	11
Lease liabilities	80,294	0	112,612	0	114,127	0
Total current liabilities	17,298,192	31	16,444,371	30	17,502,968	29
Total liabilities	24,325,074	44	24,902,536	45	28,014,865	47
Total equity and liabilities	55,854,572	100	55,032,700	100	60,058,217	100

Horizontal Analysis of Statement of Financial Position – Group

	2025		2024		2023
	LKR ’000	%	LKR ’000	%	LKR ’000	%
Assets
Non-current assets
Property, plant and equipment	17,270,048	(5)	18,142,428	(10)	20,258,577	–
Right-of-use assets	1,575,062	(6)	1,681,152	(3)	1,740,026	–
Deferred tax assets	1,947,104	(13)	2,239,540	21	1,856,016	–
Other non-current assets	1,476,202	(27)	2,033,857	(3)	2,103,132	–
Total Non-current assets	22,268,416	(8)	24,096,977	(7)	25,957,751	–
Current assets
Inventories	11,332,129	(3)	11,645,818	(13)	13,382,977	–
Trade and other receivables	11,920,512	22	9,773,644	8	9,025,553	–
Current tax receivables	730,058	19	614,466	24	496,702	–
Other financial assets	4,019,419	141	1,668,451	(49)	3,281,426	–
Cash and cash equivalents	5,584,038	(23)	7,233,344	(9)	7,913,808	–
Total Current assets	33,586,156	9	30,935,723	(9)	34,100,466	–
Total assets	55,854,572	1	55,032,700	(8)	60,058,217	–
Equity
Capital and reserves
Stated capital	4,582,871	3	4,442,234	0	4,442,234	–
Exchange equalisation reserve	15,393,591	(2)	15,752,202	(13)	18,047,539	–
Share option scheme	186,667	2	181,691	18	153,491	–
Retained earnings	11,366,369	17	9,754,037	4	9,400,088	–
Total equity	31,529,498	5	30,130,164	(6)	32,043,352	–

	2025		2024		2023
	LKR ’000	%	LKR ’000	%	LKR ’000	%
LIABILITIES
Non-current liabilities
Borrowings	2,531,225	(39)	4,139,942	(34)	6,238,676	–
Lease liabilities	1,222,829	(1)	1,229,391	(8)	1,340,989	–
Deferred tax liabilities	2,150,800	(3)	2,213,454	(6)	2,363,673	–
Retirement benefit obligations	1,122,028	28	875,378	54	568,559	–
Total non-current liabilities	7,026,882	(17)	8,458,165	(20)	10,511,897	–
Current liabilities
Trade and other payables	12,064,278	11	10,866,322	3	10,555,776	–
Current tax liabilities	212,640	(25)	281,655	(42)	489,789	–
Borrowings	4,940,980	(5)	5,183,782	(18)	6,343,276	–
Lease liabilities	80,294	(29)	112,612	(1)	114,127	–
Total current liabilities	17,298,192	5	16,444,371	(6)	17,502,968	–
Total liabilities	24,325,074	(2)	24,902,536	(11)	28,014,865	–
Total equity and liabilities	55,854,572	1	55,032,700	(8)	60,058,217	–

Quarterly Financial Information

	Quarter 1 30 June 24 LKR ’000	Quarter 2 30 September 24 LKR ’000	Quarter 3 31 December 24 LKR ’000	Quarter 4 31 March 2025 LKR ’000
Revenue	15,392,521	17,280,011	17,115,663	17,247,862
Profit before tax	273,706	1,004,447	1,415,597	1,353,623
Tax	(115,405)	(248,365)	(437,301)	(465,196)
Profit after tax	158,301	756,082	978,296	900,084
Non-current assets	23,986,996	23,682,337	22,616,951	22,262,751
Current assets	32,621,138	31,997,676	33,797,379	33,896,641
Total assets	56,608,134	55,680,013	56,414,330	55,159,641
Equity	30,448,844	30,436,379	30,864,635	31,529,246
Non-current liability	9,695,691	8,257,699	7,298,748	6,999,419
Current liability	16,463,599	16,985,935	18,250,947	17,630,976
Total equity and liabilities	56,608,134	55,680,013	56,414,330	56,159,641
EPS	0.22	1.27	2.62	3.87
Net asset per share	42.20	42.19	42.78	43.70
Closing market price	40.5	40.50	52.40	51.00
Highest price	42.2	41.90	54.00	59.00
Lowest Price	36.6	37.00	40.00	45.00
Float adjusted market capitalisation	11,679,598,332	11,695,147,659	15,139,340,194	14,715,074,676
Share trading information
Number of transactions	2,760	2,263	5,621	6,473
Number of shares traded	18,223,313	14,390,851	34,114,137	53,596,595
Value of shares traded	704,702,635	574,733,612	1,555,026,140	2,836,675,270