Lion Brewery 4Q net up from low base; says worries persist over future biz

Lion Brewery (Ceylon) PLC saw revenues recovering during the three months to March 2021 (4Q21) from a lower base last year, but virus resurgence and the subsequent restrictions on consumer activity have clouded the firm’s future outlook.

Lion Brewery, which also has an expansive export business, generated revenues of Rs.14.8 billion for the quarter under review, up 22 percent from a year ago.  But the company said that came from a lower base and it had no business during the final 10 days of the same quarter in 2020 due to curfews, a period which is typically considered as the peak sales season ahead of the traditional new year. 

For the quarter under review, the company reported operating profit of Rs.1.2 billion, up 49 percent from the same period last year. 

With fresh restrictions coming into effect from mid-April, Lion Brewery said it is currently assessing their potential negative impact on the company’s operational and financial performance.

“The COVID-19 pandemic remains and the economic fallout there from – particularly arising out of currency volatility and import restrictions – is likely to be felt in the months ahead. 

The slowdown in tourism will also impact the economy. How these translate in to consumer purchasing patterns will determine the performance of the company in the on going financial year,” Lion Brewery said.

Liquor shops have been ordered to close down three hours prior to their legitimate closure time to apparently slow the spread of COVID-19, similar to the11.00 p.m. to 4.00 a.m. island wide travel ban in effect from May 31. 

Meanwhile, Lion Brewery reported earnings of Rs.6.60 a share or Rs.528.2 million for the quarter under review compared to earnings of Rs.6.84 a share or Rs.547.5 million in the same quarter last year. 

For the financial year ended in March 31, 2021 (FY21), the company reported earnings of Rs.30.89 a share or Rs.2.5 billion compared to earnings of Rs.35.15 share or Rs.2.8 billion in the previous year. 
The annual sales were up 4 percent to Rs.49.8 billion.  

“As shareholders are aware, the country was under COVID related curfew during the first 45 days of the financial year and this had a significant negative impact on both sales and profitability. Similarly, lockdowns in parts of the country during the third quarter of the financial year also had a negative impact on performance. Considering these factors, the overall performance for the year is satisfactory,” Lion Brewery said. 

“Special mention must be made of the company’s export performance reaching across 25 countries. Export revenue and profits grew by 23 percent and 113 percent respectively over the previous year, a commendable performance considering a world locked down by a pandemic,” it added.