Teejay Group strengthens resilience as market conditions soften in 1Q

Chairman Ajit Gunewardene (left) and CEO Pubudu De Silva

Teejay Group yesterday said it posted revenue of Rs. 15.64 billion in the quarter ended 30 June 2026 (1Q FY2026/27) representing a marginal 1% year-on-year decline. 

It said the muted performance was primarily driven by lower sales volumes, continued pricing pressure from key customers and subdued demand across key markets. In addition, geopolitical disruptions, including the Strait of Hormuz crisis, which affected global supply chains and business operations, further impacted performance adversely. 

Despite these headwinds, the Group continued to advance its strategic transformation agenda by optimising its product mix, diversifying markets and enhancing cost competitiveness to strengthen resilience and support sustainable long-term growth.

Consequently, the Group recorded a gross profit of Rs. 300 million for the quarter ended 30 June 2026, reflecting a significant 75% year-on-year decline. The decrease in gross profit was primarily attributable to lower sales volumes and persistent margin pressures arising from the prevailing market environment, which continued to impact the Group’s profitability during the period.

The Group reported a net loss of Rs. 480 million for the period under review, compared to a net profit recorded in the corresponding period of the previous year. Simultaneously, decisive cost transformation initiatives, organisational restructuring and strategic operational realignments were implemented during the period, reinforcing its operational foundation and positioning the business for improved long-term performance.

Distribution and administrative expenses for the quarter under review amounted to Rs. 932 million and Rs. 136 million, respectively, representing year-on-year reductions of 3% and 16% compared to the corresponding quarter of the previous financial year. These reductions were primarily driven by the Group’s continued focus on cost optimisation initiatives and disciplined expense management practices.

Chairman Ajit Gunewardene said: “Periods of market uncertainty often provide the greatest opportunity to strengthen an organisation for the future. While global market conditions remained challenging during the quarter, Teejay continued to execute its long-term transformation agenda with discipline and conviction. Our strategic focus on operational agility, product diversification, cost competitiveness and financial resilience ensures that we are not merely responding to today’s challenges but preparing the business to capture tomorrow’s opportunities.”

Despite the headwinds, the Group maintained a strong financial position at the close of the first quarter, supported by a robust balance sheet and a healthy cash balance of Rs. 10.6 billion. The net asset base increased to Rs. 34 billion, underscoring the Group’s solid financial stability. Consequently, the net asset value per share stood at Rs. 47.08, reflecting sustained shareholder value and a strong capital position.

Group CEO Pubudu De Silva said: “The quarter presented a challenging operating environment, but we remained focused on strengthening the business through disciplined cost management, operational efficiencies and continued diversification of our product portfolio and markets. While near-term conditions remain challenging, we are confident that the actions taken during the quarter have reinforced our competitiveness and positioned Teejay to benefit as market demand gradually recovers.”

Looking ahead to the rest of FY2026/27, the Group is well positioned to deliver sustainable and profitable growth, supported by a leaner cost structure, a diversified multi-location manufacturing and operational footprint and a strengthened product portfolio. 

This broader geographic presence enhances business resilience, operational flexibility and customer proximity across key markets. It is expected that as market conditions gradually improve, tariff-related pressures ease and customer demand recovers, the Group will capitalise on emerging opportunities, drive long-term value creation and further strengthen its competitive position in the global marketplace.