TEEJAY GROUP BATTLES GLOBAL TEXTILE SLOWDOWN WHILE PRESERVING FINANCIAL RESILIENCE

Teejay Group has reported a sharp decline in profits amid weakening global textile demand, US tariff pressures and rising costs. Despite difficult market conditions, the company says disciplined cost management, strong liquidity and balance sheet resilience have helped preserve shareholder value while positioning the business for long-term stability.

The Group recorded revenue of LKR 60.04 billion for the year ended 31 March 2026, marking a 10 per cent year-on-year decline. The performance was affected by continued softness in international textile markets, reciprocal tariffs imposed by the United States and mounting pricing pressures in key export destinations, all of which contributed to lower sales volumes.

Gross Profit fell by 36 per cent to LKR 5.02 billion, reflecting the strain placed on manufacturing operations by reduced production volumes and underutilised plant capacity. The company also cited an unfavourable product mix and sustained pressure on selling prices as significant factors behind the contraction in margins.

Profit After Tax dropped sharply to LKR 54.7 million, representing a 98 per cent decline compared with the previous year. The Group attributed the fall primarily to higher rupee-denominated operating costs, provisions for doubtful debts and one-off restructuring expenses linked to right-sizing initiatives undertaken during the year.

Commenting on the results, Chairman Ajit Gunewardene said the year had been shaped by persistent global demand weakness and intense pricing competition across the sector.

“The year was marked by persistent global demand softness and pricing pressures, which impacted results. Despite this, we focused on operational efficiency, cost discipline, and strengthening our financial resilience. These actions position the Group to navigate ongoing uncertainty while remaining committed to long-term value creation for our shareholders,” he said.

Despite the difficult operating climate, the Group maintained a solid balance sheet position. Cash and cash equivalents stood at LKR 8.3 billion as at 31 March 2026, supported by disciplined working capital management and a strong liquidity base.

The Group’s net asset base increased by 3 per cent year-on-year to LKR 32.4 billion, while Net Asset Value per share improved from LKR 43.70 to LKR 44.91, signalling continued efforts to preserve shareholder value despite the industry downturn.

Industry analysts note that textile manufacturers globally continue to grapple with subdued consumer demand, inflationary cost pressures and geopolitical trade uncertainties. For export-oriented producers such as Teejay Group, the combination of tariff disruptions and weaker order volumes has intensified competition and placed margins under pressure.