Lion Brewery (Ceylon) (LION.N0000) Q1 24/25 earnings summary

Executive summary

• Revenue for the quarter ended 30 June 2024 grew 20% year-over-year to Rs. 29.5 billion despite a high single-digit decline in alcobev category volumes due to excise increases and consumer downtrading.

• Profit after tax for the group rose 19% year-over-year to Rs. 2.18 billion, with earnings per share at Rs. 27.23 compared to Rs. 22.74 last year.

• The company continues to invest in portfolio and premiumization initiatives, maintaining its strategy despite market headwinds.

Financial highlights

• Gross profit increased 7% year-over-year to Rs. 6.5 billion, with operating profit up 5% to Rs. 3.67 billion.

• Net finance costs decreased 77% year-over-year, supporting improved profitability.

• Net assets per share rose to Rs. 359.75 from Rs. 345.00 at 31 March 2024.

• Cash and cash equivalents at period end were Rs. 11.24 billion, down from Rs. 12.46 billion at the previous year-end.

Outlook and guidance

• The industry faces continued pressure from high excise duties, leading to volume declines and increased prevalence of illicit alcohol.

• From April 1, 2025, the corporate income tax rate for the industry will increase to 45%, impacting future profitability.