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Tuesday, 19 May 2015 01:22 - - {{hitsCtrl.values.hits}}
In the first quarter of 2015, Ceylon Tobacco Company contributed Rs. 21.3 billion to the Government - an increase of 20% compared with the same period last year - driven primarily by an excise-led price increase experienced in October 2014 and higher volumes.
The increase in domestic volumes of 11% during the quarter could be attributed to a higher level of consumer confidence and an increase in disposable income.
The CTC said it complied with a 60% Pictorial Health Warning from 1 January 2015 as required by regulations. As a manufacturer, the company also complied with the subsequent change to the law requiring an 80% Pictorial Health Warning, whilst the law has provided a grace period to exhaust existing stocks until 1 June 2015. The total cost of implementing GHW for Q1 was Rs. 118 million.
“During the first quarter we continued to see a volume growth in the Beedi segment. The volume growth in unregulated low price products such as Beedi remains a key risk to Government revenue contribution from the regulated cigarette industry,” CTC said.
It also said the law enforcement agencies continued to effectively curtail the spread of unauthorised and illicit tobacco products. In the first three months of 2015, a total of 249 raids have yielded 6 million illegal cigarettes at a market value of Rs. 180 million.
The company’s Profit-after-Tax stood at Rs. 2.5 billion for the first quarter, up by 23% over a year earlier.
CTC said it remained committed to investing in key brands to infuse value in mainstream brand John Player Gold Leaf. Export sales revenue increased by Rs. 35.4 million for the quarter and the company will continue its endeavour to improve export performance into the future.
The company’s estimated liability of the Super Gain Tax as proposed in the interim budget is Rs. 3.8 billion, calculated at 25% of the taxable income for the year of assessment 2013/2014.
However, the Bill to impose the tax is still pending parliamentary approval.
CTC Board of Directors has recommended a first interim dividend of Rs. 3.45 per share to be paid by 28 May 2015.
The company said its flagship CSR initiative, the Sustainable Agricultural Development Program (SADP), continued to focus on alleviating poverty and uplifting the livelihoods of families in rural Sri Lanka. The total number of active families supported by the company as at March 2015 stood at 17,464, comprising 67,307 beneficiaries in 16 districts.
