SIR-LANKA – Lion Brewery (Ceylon) PLC, a Sri-Lankan-based multinational brewery has announced a growth of 17% in the 2022 full year amid the toughest macroeconomic conditions characterized by escalating costs, foreign exchange shortages, and shortages of ships.

Sri Lanka’s largest brewery posted export revenues of Rs.19.0 billion (US$240 million) in the three months to March, in the fiscal fourth quarter compared to Rs.14.77 billion (US$190 million) in the same period in 2021.

The company also reported earnings of Rs.1.29 billion (US$17 million) for the January – March quarter compared to Rs.528.17 million (US$6.8billion) in the corresponding period in 2021.

It also reported earnings of Rs.45.85(US$0.59) a share or Rs.3.67 billion (US$47 million) for the year ended March 2022, compared to earnings of Rs.30.80(US$ 0.010) a share or Rs.2.47billion (US$32 million) in the previous financial year.

The revenues for the fiscal year 2022 were Rs.58.57 billion (US$750 million), as the country’s producer prices rose by a record of 34.6 percent in the twelve months to March 2022, underscoring the intensity of the price pressures facing the producers. 

The company said despite challenges, its growing exports helped it weather the foreign exchange crisis as such incomes rose by a robust 45 percent.

However, the solid growth in the top line was undermined to a degree by the escalating costs as a result of the rising raw material prices and freight charges, which were then met with the free float of the rupee, sending prices of all goods and services through the roof. 

The rupee float was, a “disorganized” exercise executed after the “misguided depletion of foreign currency reserves”, which resulted in, “near hyperinflationary conditions”, according to Lion brewery.

The company further urged the Sri-Lanka government to consider a sensible tax policy that can both crackdown on massive taxes lost on illicit liquor and make more taxes on the legal alcoholic beverage industry.

The company estimates over Rs.75 billion (US$970 million) in lost taxes to the government through tax evasion by the illicit liquor industry, which is equivalent to 50 percent of excise taxes collected or 0.5 percent of the Gross Domestic Product.

The Lion brewery said it has paid a total of Rs.46 billion (US$590 million) in taxes in the March quarter despite COVID-19-related closures, which exceeded the prior-year period taxes.

Meanwhile, Lion brewery expects a deep recession in Sri Lanka in 2022-23 as the financial conditions tighten due to the rupee float, lingering dollar shortage, and monetary and fiscal tightening.

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