Lion Brewery (Ceylon) (LION.N0000) Q2 24/25 earnings summary

Executive summary

• Revenue for the six months ended 30 Sep 2024 grew 18% year-over-year to LKR 61.4 Bn, but domestic alcobev volumes declined due to steep excise duty hikes and increased illicit alcohol consumption.

• Profit after tax for the group rose 8% year-over-year to LKR 8.4 Bn for the six months, with earnings per share at LKR 58.56.

• The company paid LKR 45.6 Bn in taxes in the first half and expects to contribute LKR 95 Bn for the full year, about 3% of government tax revenue.

• Strategic initiatives included completion of the innovation brewery, ongoing digital transformation, and progress in adjacent market expansion.

Financial highlights

• Group revenue for Q2 was LKR 31.9 Bn, up 17% year-over-year; gross profit for the quarter was LKR 7.2 Bn, up 10%.

• Group profit before tax for the six months was LKR 7.8 Bn, up 7% year-over-year.

• Net assets per share increased to LKR 391.05 as at 30 Sep 2024 from LKR 345.00 at 31 Mar 2024.

• Cash and cash equivalents at period end were LKR 15.2 Bn for the group.

Outlook and guidance

• The outlook for H2 FY24/25 is uncertain due to a probable excise duty hike in Jan 2025, with management urging caution to support the formal market.