Bill Lam, Chairman of the company told the newspaper that this marked an emphatic recovery from the temporary setback suffered in the previous quarter, with sales up by 29% and net profit up by 72% on a quarter to quarter basis.

On a year to year basis the company was back on a strong growth trajectory with both sales and net profit up by 7%.

Gross profit

The gross profit for the second quarter this year reduced by 2% to Rs. 339 million, mainly due to lower margins arising from a combination of factors, including changes in product mix, outsourcing and higher dyes and chemical costs.

However, the company managed to cut down its administrative and distribution expenses by 4% to Rs. 99 million, which resulted in the operating profit remaining at Rs. 249 million, on par with the corresponding quarter of last year.

Financial results

TJL continued to maintain its near debt-free balance sheet as at 30 September 2014, with a strong cash position of Rs.1.6 billion, and only a temporary overdraft of Rs.366 million.

However, according to Bill Lam, the cash balance was 21% less compared with the previous year, due to dividends and capital expenditure during the current quarter.

As a result, net finance income for the second quarter was Rs. 16 million, 10% lower compared to last year. Lower interest rates also contributed to this reduction in net finance income. The other operating income of Rs. 21million allowed the company to close the quarter at a net profit of Rs. 282million, an improvement of 7% from last year.

Strategic initiatives

Commenting on strategic initiatives, Bill Lam highlighted that the construction phase of the multi fuel co-generation boiler plant was successfully completed during the quarter and test operations had been started.

The plant will be fully operational in the coming quarters and is expected to generate substantial savings in energy costs. Similarly, the recently added 10-12% capacity will be fully utilised during the coming quarters with US demand coming back on track, the company reports.

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