Lion Brewery (Ceylon) PLC has seen a disappointing second quarter posting a loss of Rs.17.1 million in he three months ended September 30, down sharply from a profit of Rs.31.1 million a year earlier pushing half-year losses to Rs.21.9 million, down from a profit of Rs.59.2 million earned in the comparative period the previous year.

A 94% increase in finance expenses to Rs.187.1 million eroded the operating profit of Rs.160.3 million posted by the company for the half year, marginally up 2% from an operating profit of Rs.157.5 million, an interim financial statement now with shareholders revealed.

Lion, a member of the Carson Cumberbatch group, is the biggest player in the country’s beer segment. Lion is held by Ceylon Brewery PLC, also a member of the Carsons group, with Carlsberg of Denmark as a partner in the manufacturing company (Lion).

Following increases in excise duty pushing up beer prices, Lion’s turnover was up 23% to nearly Rs.2.3 billion in the six-month period and 20% to Rs.1.2 billion in the second quarter.

Distribution and administrative expenses were up during the half year although there was a decline in other operating expenses that were down 13% to Rs.42.4 million.

Lion has a stated capital of Rs.1.3 billion, capital reserves of Rs.232.4 million and retained earnings of Rs.522.2 million in its books.

Non-current liabilities due after one year amount to Rs.579 million while long-term loans repayable within a year ran at Rs.86.4 million. Rs.88.7 million was also due to related companies.

Lion had net assets of Rs.34.85 per share, up from Rs.33.77 a year earlier, while the share traded at a high of Rs.62 and a low of Rs.55 during the half year. This compared to a trading range of Rs.70 to Rs.40 a year earlier.

Ceylon Brewery PLC, Lion’s holding company, saw revenue flat at Rs.56.5 million for the half-year and posted a profit after-tax of Rs.39.6 million, same as during the first half of the previous year.

During the year ended March 31, 2008 Lion posted an after-tax profit of Rs.178.4 million on revenue of R.5.2 billion while the Ceylon Brewery posted an after-tax profit of Rs.65.7 million on revenue of Rs.119.3 million.