CTC March net climbs amid higher fag prices

The local unit of British American Tobacco PLC, Ceylon Tobacco Company PLC (CTC), increased its net profit for the quarter ended March 31, 2016 (1Q16) by 22.7 percent to Rs.3.1 billion from a year ago due to higher fag prices, the interim results showed. The earnings per share rose to Rs.16.31 from Rs.13.29. The performance improved due to the top line, which expanded by 14.3 percent yearon- year (YoY) to Rs.29.6 billion, amid exciseled price increase since October 2015. But the volumes remained relatively flat.

“The top line growth for the three months ended March 31 was spearheaded by the mainstream and premium segments in the company’s brand portfolio,” the company said in an earnings release. At yesterday’s close, the CTC share ended 50 cents or 0.05 percent up, at Rs.1,099.70. CTC has maintained its top spot in terms of market capitalization in the Colombo Stock Exchange with a value of Rs.206 billion consisting of 7.71 percent of the total market, slightly above the market heavyweight John Keells Holdings PLC, which has a market capitalization of Rs.191 billion (7.16 percent). Meanwhile, as the top tax payer to the exchequer, CTC pumped as much as Rs.25.6 billion during the quarter in excise tax, corporate tax and other levies.

This is an increase of 20 percent from the same period last year. However, the company was last year slapped with a one-off capital gains tax of Rs.3.8 billion, including which it paid a total of Rs.91.6 billion in total taxes and levies to the government. In the last financial year, CTC posted a net profit of Rs.10.6 billion, up 23.3 percent on a gross revenue of Rs.106.5 billion. CTC has been repeatedly crying over the locally-manufactured ‘beedi’ posing a threat to the government revenue contribution from the tobacco industry but many families make a living out of the inferior fag type. But such products pose higher health risks. Meanwhile, the law enforcement agencies have confiscated a total of 2.3 million illegal cigarettes at a market value of Rs.76 million during the three months through 472 raids.