Lion Brewery (Ceylon) PLC
Interim Condensed Financial Statements for the Second Quarter ended
30 th September 2022
LION BREWERY (CEYLON) PLC
Review
The economic crisis continues to have an impact on the quarter under review. High interest rates and inflation compounded by the fuel and electricity crisis brought about a challenging environment which had a considerable impact on operations. A series of tax increases further stretched consumer affordability. The business experienced significant cost inflation with our raw material basket inflating by over 100%. A new import tax was introduced on our key raw material which further increased our cost base. Furthermore, the increases in fuel and electricity prices also had significant negative impacts on the business. These tax and cost increases resulted in consumer pricing increasing in excess of 60% so far, which is well in excess of wage growth. Despite the difficult conditions, the company continued investing behind capabilities and brands with overhead expenses increasing by LKR 650m over the prior year. Cash flow was strained due to increased working capital requirements and capital expenditure costs.
Despite the pressures on the business, we delivered substantial tax growth to Government in calendar year 2022. Estimated total taxes paid by Lion Brewery in 2022 will increase by 60% to c. LKR 60bn. This tax growth is driven primarily by excise, VAT and SSL increases. Had the increases been implemented on January 1st, total tax growth would have been even higher. The beer industry did not benefit from the 2019 VAT reduction as it was implemented in a tax neutral manner by simultaneously increasing excise taxes. As a result, the increases this year have been entirely incremental to government revenue.
The outlook for the rest of the year is negative as the cumulative effect of the economic depression takes hold. This will be compounded by a steep increase in personal income taxes which will reduce take home pay. Following the Government's successful efforts to restore regular gas and fuel supplies, supply of illicit alcohol has also resumed. As beer prices have significantly outpaced wage growth, consumers are seeking out cheaper alternatives. As such, continued volume loss to the legal industry is to be expected. No relief is expected on the cost front.
LION BREWERY (CEYLON) PLC
BOARD OF DIRECTORS AS AT 30TH SEPTEMBER 2022
Mr. D. A. Cabraal (Chairman)
Mr. H. Selvanathan (Deputy Chairman)
Mr. R. H. Meewakkala (CEO/Director) Mr. D. C. R. Gunawardena
Mr. K. Selvanathan (Director / Alternate Director to H. Selvanathan) Mr. D. R. P. Goonetilleke
Mrs. S. J. F. Evans
Mr. S. Selvanathan Mr. S. Clini
Ms. V. Gun
LION BREWERY (CEYLON) PLC
CONDENSED STATEMENT OF FINANCIAL POSITION
Company | Group | |||||
In Rs.'000s | 30‐Sep‐22 | 31‐Mar‐22 | 30‐Sep‐22 | 31‐Mar‐22 | ||
(Audited) | (Audited) | |||||
ASSETS | ||||||
Non‐ Current Assets | ||||||
Property, plant & equipment | 19,237,373 | 18,829,387 | 20,942,568 | 20,542,588 | ||
Right of use assets | 174,584 | 151,914 | 174,584 | 151,914 | ||
Intangible assets | 392,278 | 750,093 | 392,278 | 750,093 | ||
Investments in subsidiary | 1,029,623 | 1,029,623 | ‐ | ‐ | ||
Total Non‐Current Assets | 20,833,858 | 20,761,017 | 21,509,430 | 21,444,595 | ||
Current Assets | ||||||
Inventories | 4,436,291 | 4,438,517 | 4,436,291 | 4,438,517 | ||
Trade and other receivables | 4,446,106 | 1,791,119 | 4,451,720 | 1,796,357 | ||
Amounts due from related companies | 361,165 | 374,178 | 361,165 | 374,178 | ||
Cash and cash equivalents | 11,493,527 | 12,889,986 | 11,630,453 | 13,013,232 | ||
Total Current Assets | 20,737,089 | 19,493,800 | 20,879,629 | 19,622,284 | ||
Total Assets | 41,570,947 | 40,254,817 | 42,389,059 | 41,066,879 | ||
EQUITY AND LIABILITIES | ||||||
Equity | ||||||
Stated capital | 2,537,801 | 2,537,801 | 2,537,801 | 2,537,801 | ||
Capital reserves | 1,487,870 | 1,487,870 | 2,092,103 | 2,092,103 | ||
Retained earnings | 16,904,494 | 15,657,552 | 16,556,239 | 15,297,757 | ||
Total Equity | 20,930,165 | 19,683,223 | 21,186,143 | 19,927,661 | ||
Non‐ Current Liabilities | ||||||
Loans and borrowings | 1,968,607 | 2,300,311 | 1,968,607 | 2,300,311 | ||
Lease creditor (Note 04) | 187,183 | 160,546 | 187,183 | 160,546 | ||
Employee benefits | 182,148 | 173,704 | 182,148 | 173,704 | ||
Net deferred tax liabilities | 4,490,396 | 4,660,920 | 5,050,358 | 5,225,626 | ||
Total Non‐ Current Liabilities | 6,828,334 | 7,295,481 | 7,388,296 | 7,860,187 | ||
Current Liabilities | ||||||
Trade and other payables | 3,460,283 | 3,234,345 | 3,460,200 | 3,235,794 | ||
Amounts due to related companies | 317,765 | 155,756 | 317,765 | 155,756 | ||
Refundable deposits | 2,536,784 | 2,301,181 | 2,536,784 | 2,301,181 | ||
Current tax liabilities | 2,925,098 | 3,116,118 | 2,927,353 | 3,117,587 | ||
Loans and borrowings | 3,087,526 | 3,347,696 | 3,087,526 | 3,347,696 | ||
Lease creditor (Note 04) | 24,556 | 24,531 | 24,556 | 24,531 | ||
Bank overdrafts | 1,460,436 | 1,096,486 | 1,460,436 | 1,096,486 | ||
Total Current Liabilities | 13,812,448 | 13,276,113 | 13,814,620 | 13,279,031 | ||
Total Liabilities | 20,640,782 | 20,571,594 | 21,202,916 | 21,139,218 | ||
Total Equity and Liabilities | 41,570,947 | 40,254,817 | 42,389,059 | 41,066,879 | ||
Net assets per ordinary share (Rs.) | 261.63 | 246.04 | 264.83 | 249.10 |
The above figures are provisional and subject to audit.
These financial statements are in compliance with the requirements of the Companies Act No. 07 of 2007.
(Sgd.)
J.N. Goonaratne
Deputy Chief Financial Officer
The Board of Directors is responsible for the preparation and presentation of these Financial Statements.
Approved and signed on behalf of the Managers | Approved and signed on behalf of the Board | |
(Sgd.) | (Sgd.) | (Sgd.) |
V. R. Wijesinghe | R.H. Meewakkala | D.R.P. Goonetilleke |
Director | Director | Director |
Carsons Management Services (Private) Limited | ||
11th November 2022 |
LION BREWERY (CEYLON) PLC
CONDENSED STATEMENT OF COMPREHENSIVE INCOME ‐ COMPANY
In Sri Lankan Rs.'000s | Quarter Ended | Change | Six Months Ended | Change | Year Ended | |||||||||
30.09.2022 | 30.09.2021 | % | 30.09.2022 | 30.09.2021 | % | 31.03.2022 | ||||||||
(Audited) | ||||||||||||||
Revenue | 25,002,496 | 11,205,449 | 123 | 46,313,114 | 21,762,587 | 113 | 58,570,885 | |||||||
Cost of sales | (18,965,350) | (9,245,694) | 105 | (35,714,643) | (17,767,834) | 101 | (47,520,726) | |||||||
Gross profit | 6,037,146 | 1,959,755 | 208 | 10,598,471 | 3,994,753 | 165 | 11,050,159 | |||||||
Other income | 53,992 | 42,385 | 27 | 124,585 | 74,948 | 66 | 189,598 | |||||||
6,091,138 | 2,002,140 | 204 | 10,723,056 | 4,069,701 | 163 | 11,239,757 | ||||||||
Distribution expenses | (1,314,832) | (491,023) | 168 | (2,394,810) | (1,141,327) | 110 | (2,865,746) | |||||||
Administrative expenses | (612,138) | (585,391) | 5 | (1,123,741) | (975,276) | 15 | (2,122,587) | |||||||
Other expenses | (171,424) | (91,894) | 87 | (504,849) | (200,075) | 152 | (480,695) | |||||||
Impairment of intangible assets | ‐ | ‐ | ‐ | (353,229) | ‐ | 100 | (463,578) | |||||||
Operating profit before finance cost | 3,992,744 | 833,832 | 379 | 6,346,427 | 1,753,023 | 262 | 5,307,151 | |||||||
Finance income | 336,064 | 157,275 | 114 | 622,341 | 298,175 | 109 | 644,827 | |||||||
Finance costs | (819,191) | (245,484) | 234 | (889,942) | (453,335) | 96 | (389,793) | |||||||
Net finance income /(cost) | (483,127) | (88,209) | 448 | ( 267,601) | ( 155,160) | 72 | 255,034 | |||||||
Profit before taxation | 3,509,617 | 745,623 | 371 | 6,078,826 | 1,597,863 | 280 | 5,562,185 | |||||||
Income tax expense | (1,252,048) | (254,152) | 393 | (2,428,444) | (557,901) | 335 | (2,214,371) | |||||||
Deferred taxation | (87,404) | 70,672 | (224) | 170,524 | 136,206 | 25 | 347,440 | |||||||
Profit after taxation | 2,170,165 | 562,143 | 286 | 3,820,906 | 1,176,168 | 225 | 3,695,254 | |||||||
Other comprehensive income | ||||||||||||||
Items that will not be reclassified to profit or loss | ||||||||||||||
Remeasurement of employee benefit obligations | ‐ | ‐ | ‐ | ‐ | ‐ | ‐ | 45,763 | |||||||
Deferred tax charge on actuarial gain | ‐ | ‐ | ‐ | ‐ | ‐ | ‐ | (18,305) | |||||||
Revaluation gain on land & buildings | ‐ | ‐ | ‐ | ‐ | ‐ | ‐ | 858,170 | |||||||
Deferred tax charge on land and building revaluation | ‐ | ‐ | ‐ | ‐ | ‐ | ‐ | (343,268) | |||||||
Total other comprehensive income for the period net of tax | ‐ | ‐ | ‐ | ‐ | ‐ | ‐ | 542,360 | |||||||
Total comprehensive income for the period | 2,170,165 | 562,143 | 286 | 3,820,906 | 1,176,168 | 225 | 4,237,614 | |||||||
Earnings per ordinary share (Rs.) | 27.13 | 7.03 | 47.76 | 14.70 | 46.19 |
The above figures are provisional and subject to audit.
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Lion Brewery Ceylon plc published this content on 14 November 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 November 2022 11:11:03 UTC.