Sri Lanka textile maker eyes acquisition, new energy sources
May 25, 2012 (LBO) - Sri Lanka's Textured Jersey Plc, said it wants aquire another plant in South Asia to expand production and is looking to move away from furnace oil after a tariff increase, though operating profits increased with falling cotton prices.
"Acquisition of operational facilities, which may now be available at a reasonable price following last year’s industry upheavals, should provide a faster return than organic expansion and yield optimal returns on the IPO (initial public offer) funds," the firm said in a statement.
"Management is also evaluating options to set up a coal/bio mass boiler in order to offset the negative impact of the recent furnace oil price increase, while effective inventory management remains a priority with cotton prices having fallen to their lowest levels since February 2010."
Textured Jersey, a joint venture between Sri Lanka's Brandix apparel group and Hong Kong, based firm said profits fell to 218 million rupees in the March 2012 quarter from 223 million a year earlier due a 110 million rupees forex loss on a loan.
But the firm also benefitted from a depreciation of the rupee, which lowers the real cost of worker wage compared to dollar priced sales.
Textured Jersey said has declared 36 cents per share dividend, bringing the total for the year to 48 cents per share. At the current market price of 7.50 rupees it is a 6.4 percent yield.