Sri Lanka’s Lion Brewery December profits up 29-pct
ECONOMYNEXT – Sri Lanka’s Lion Brewery said profits grew 29 percent to 412.5 million rupees in the December 2017 quarter from a year earlier with sales recovering after floods shut its brewery for six months in 2016.
The company reported earnings of 5.16 rupees a share in the quarter. In the nine months to December earnings were 10.24 rupees a share on total profits of 819.2 million rupees, compared to a loss of 634 million rupees a year earlier due to floods inundating its brewery.
Revenue in the quarter grew 50 percent to 8 billion rupees, cost of sales increased 36 percent to 6 billion rupees, expanding gross profits 121 percent to 1.9 billion rupees, interim accounts filed with the stock exchange showed.
Earnings growth was helped by a one-off stocks and assets write down due to flood related damages amounting to 1.1 billion rupees a year earlier.
Distribution costs rose 34 percent to 796 million rupees and administrative expenses grew 8 percent to 264 million rupees.
Net finance costs fell 15 percent in the quarter to 345 million rupees.
Lion Brewery reported flood related losses of 1 billion rupees in the year ending March 2017. The company receivedinsurance claims totalling 2 billion rupees, half of it to cover business interruption.
To help the company recover, the government granted the brewer tax concessions to import beer for the local market at the same rate that applied to locally manufactured beer. However a Buddhist monk filed a law suit against the concessions. The case is being heard in the Court of Appeals.
The company, a unit of Ceylon Beverage Holdings, brews the popular Lion Beer, a hit even among tourists. Carlsberg Brewery Malaysia holds a 25 stake in the company which also sells beer under that brand in the domestic market and the Maldives.
The company exports to 15 countries accounting for less than two percent of total revenue even prior to the floods.
The 75 million lire per annum brewery was shut down for nearly six months after floods in May 2016. (COLOMBO, February 15, 2018)