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Sri Lanka Lion Beer net down 91-pct on Covid-19 lockdown

ECONOMYNEXT – Profits at Sri Lanka’s Lion Beer Plc fell 91 percent from a year earlier to 72.5 million rupees in the June 2020 quarter amid a Coronavirus lockdown and tourism downturn, interim accounts show.

Lion Beer reported earnings of 91 cents per share for the quarter.

Revenues fell 45 percent to 6.4 billion rupees in the June quarter, cost of sales 41 percent to 5.32 billion rupees and gross profit fell 58 percent to 1.1 billion rupees.

The firm reported finance income of 236 million rupees, expenses of 432 million rupees and net finance costs of 195 million rupees, up from 125 million rupees last year.

“The Covid‐19 pandemic & the resultant slowdown in economic activity dominated the 1st quarter of the on‐going financial year,” the firm told shareholders.

“The government to its credit took strong but effective steps to control the spread of a virus that has caused chaos across the world.

“Sri Lanka has emerged relatively unscathed from a health perspective; as per official statistics those infected are remarkably low when compared to most other countries.

“Loss of life has been even lower. The economic fallout though is yet to be fully ascertained. All indications are that the remainder of the financial year will be one full of challenges.”

The firm said it continued to pay salaries during the lockdown which was the reason the cost of sales fell at a slower pace than revenue.

“Whilst the quarter just ended was no doubt the most difficult for the private sector in recent times, the remainder of the year is likely to be challenging as well,” Lion Beer said.

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“Government has taken many steps to mitigate the risks to the economy. Yet the prospects for growth at the level of the
corporate remains subdued.

“Under these circumstances, management will take a conservative approach in the remainder of the year with
the principle focus being to retain the underlying strength of the company’s balance sheet.”

The firm said it had a strong balance sheet and its credit had been upgrade to AAA (lka) by Fitch Ratings. (Colombo/Aug15/2020)