Pandemic liquor restrictions cut Lion profits
- Yet exports grow thanks to Middle East, Africa
Driven by prolonged liquor store closures in the country following the spread of the pandemic, beer manufacturer Lion Brewery (Ceylon) PLC has witnessed a dip in its profit, with profit after tax (PAT) dropping to Rs. 2.4 billion in 2020/21 from Rs. 2.8 billion a year ago.
However, it has been able to record Rs. 49.8 billion in revenue during the financial year (FY) that ended 31 March 2021, despite the year being drastically affected by the pandemic. Lion also recorded profit before tax (PBT) of Rs. 4.25 billion.
When it comes to revenue, it has indicated a growth of 4% in comparison to that of 2020. However, the PBT saw a decline of 3 % while the profit was Rs. 4.3 billion during FY 2020.
Lion Brewery Chairman D.A. Cabraal stated that during the pandemic dominated year, liquor sales were directly impacted since all liquor sales outlets of the country were closed during the lockdown due to the health measures.
Apart from the lockdown, the halt in tourism too had caused a significant reduction in beer sales. Moreover, the devaluation of the Sri Lankan rupee (LKR) against the US dollar and other foreign currency rate changes further increased the prices of raw and packaging materials, leading to higher maintenance and other input costs.
With the pandemic, the company has to go through major operational changes in order to adapt to the situation, it was further learnt.
Nevertheless, the Chairman further noted that Lion Brewery’s exports grew with a significant growth of 15% and that the products were exported to countries in the Middle East and the African continent.
The company looks forward to widening the brand portfolio by providing a number of choices to consumers in terms of products, expanding export markets seeking sustainable growth within the company. Lion Brewery also anticipates continuing to invest in its operations in its supply chain by partnering with stakeholders for a better profit.