ECONOMYNEXT – Distilleries Corporation of Sri Lanka, the island’s top arrack producer said sales fell 12 percent to 19.07 billion rupees in the March 2020 quarter and profits fell 30 percent to 1.27 billion rupees, in a quarter where Coronavirus lockdowns started.
The group reported earnings of 28 cents per share for the quarter. In the year to March 2020 reveues were flat at 81.6 billion rupees.
Net revenues after turnover taxes fell 20 percent to 6.0 billion rupees in the March quarters, while cost of sales fell 18 percent to 3.37 billion rupees and gross profits fell 23 percent to 2.6 billion rupees.
Net finance income was a positive 61 million rupees from a cost of 39 million rupees last year.
Sri Lanka began intensive lockdowns around March 20, when alcohol sales were banned on an outcry made by some doctors and anti-alcohol activists.
Sri Lanka’s alcohol producers have also been hit by regime uncertainty after a new administration banned the import of ethanol.
The move is expected to help the sales of expropriated sugar firms which are now a state enterprise.
Both policy instability, outright expropriation and other coercive state acts that violate private property rights or attenuate profits are termed regime uncertainty by classical economists. (Colombo/Sept05/2020)