ECONOMYNEXT – Profits at Ceylon Beverage Holdings fell 41 percent from a year earlier to 186.9 million rupees in the December 2018 quarter, with last year’s profits boosted by insurance receipts, but margins on beer widened sharply with sales picking up.
The company reported earnings of 8.90 rupees a share in the quarter. In the nine months to December earnings per share was 15.10 rupees on a total profit of 708 million rupees, compared to a loss of 668.7 million rupees a year earlier.
Revenue in the quarter grew 44 percent to 8.6 billion rupees which includes the year end festive season and a part of the tourism peak.
Cost of sales grew 30 percent to 6.4 billion rupees, with gross profits soaring 109 percent to 2.1 billion rupees.
Distribution costs rose 26 percent to 827 million rupees amid larger volume sales.
Net finance costs fell 14 percent to 383 million rupees.
Last year the firm received over 2.0 billion rupees of insurance and wrote off items worth 1.1 billion rupees due to flood damage.
This year’s revenues are profits are from beer sales.
The company holds 52.25 percent stakes in both Lion Brewery and Millers Brewery, and dealerships for Diageo (Johnny Walker, Smirnoff and Guinness) and Moet Hennessey (Glenmorangie and Dom Perignon). It also manages 34 pubs under the Machang, 8.8%, Chillax and O! brands.
The company suffered a loss of 1.5 billion rupee for the year ending March 2017 after floods inundated the Lion Brewery.
That year the government increased excises taxes on beer by 70 percent and later introduced VAT. But taxes were lowered this year. (COLOMBO, February 15, 2018)