Sri Lanka’s Lion Brewery avoids loss with insurance
ECONOMYNEXT – Sri Lanka’s Lion Brewery Plc, reported a 315 million rupee profit in the June 2017 quarter helped by 600 million rupee insurance receipt while revenues fell and gross profits shrank after tax hikes.
The firm reported earnings of 3.95 rupees per share.
Revenues fell 3 percent to 5.4 billion rupees in the June quarter, and cost of sales went up 1 percent to4.49 billion rupees, shrinking gross profits 20 percent to 939 million rupees.
Higher taxation with beer badly hit over the past two years with higher taxation on beer shifting demand to hard alcohol. A tax on cans was also introduced.
"As a result of these multiple taxes, the price of beer increased by as much as 75 percent over a 14-month period," the firm told shareholders.
"Thus, beer is now unaffordable. This has compelled consumers to shift to cheaper, value for money alternatives such hard alcohol, toddy & illicit alcohol."
Currency depreciation and inflation, following a bout of money printing in 2015, had hurt consumer disposable income, and most consumer firms are seeing tighter venues.
Lion received a 608 million rupee insurance claim for interrupted business when a flood hit its plant, which is now back in operation. (Colombo/Aug15/2017)