Sri Lanka’s Distilleries group net up 9.5-pct, core firm show gains

ECONOMYNEXT – Distilleries Company of Sri Lanka, which has interests in beverages, insurance and agriculture, said profits rose 9.5 percent from a year earlier to Rs1.92 billion, with the core beverage firm sales going up.

The group reported earnings of Rs6.41 for the quarter.

At the core alcohol company net revenue rose 31.8 percent to Rs6.1 billion, the cost of sales rose 35 percent to Rs3.3 billion and the firm grew gross profits 27 percent to Rs2.86 billion.

Industry analysts say sales of the ‘quarter bottle’ (185 millilitres/33.5 percent alcohol) of hard liquor have been growing after the new administration hiked taxes on strong beer.

Construction workers and others who consumed the 500 millilitre strong beer (with 8.8 percent alcohol) had switched back to hard alcohol after the tax hike.

In 2015, there was a crackdown on illegal arrack, made by some distilleries with connections to members of the ousted Rajapaksa regime.

The firm said pre-tax profits in beverages rose to Rs2.7 billion from Rs2.1 billion, financial services was flat at Rs73 million and diversified was down Rs145 million from Rs346 million.

Losses in plantations fell to Rs35 million from Rs102 million, but telecom lost Rs253 million, up from Rs156 million.

Distilleries is planning to make its subsidiary Melstacorp its parent and be listed as a pure alcohol play. (Colombo/Aug10/2016)
 

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