Updated The firm, a unit of the Hayleys conglomerate, said gross sales rose 13 percent to 13.3 million US dollars in the quarter from a year ago.
It had made a net profit of 197,422 dollars in the December quarter of the year before.
Fitch Ratings Lanka in December downgraded Hayleys MGT Knitting Mills rating to 'BBB(lka)' from 'BBB+(lka)' with a negative outlook after the fabric manufacturer warned of losses when an inquiry revealed discrepancies in inventory and accounts receivables.
The Hayleys MGT Knitting Mills stock exchange filing said a special audit verification had been done by B R De Silva , Chartered Accountants and S J M S Charted Accountants on trade receivables and inventories.
The probe had revealed "there were discrepancies between the value of physical balance of inventor