Higher volumes boost CTC’s 2Q; puffs up Rs. 43 bn tax income for state

29 July 2015 02:34 am - 0     - {{hitsCtrl.values.hits}}

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Ceylon Tobacco Company PLC (CTC), the local unit of British American Tobacco, recorded a net profit of Rs.3 billion for the June quarter (2Q15), up from Rs.2.5 billion in the same quarter of the previous year, amid higher cigarette prices and volumes. 

“The increase in domestic volumes of 10 percent as at the end of the 2nd quarter could be attributed to a higher level of consumer confidence and an increase in disposable income,” the company said.

The earnings per share for the quarter improved to Rs.15.63 from Rs.13.40. The directors recommend a second interim dividend of Rs.24.00 per share to be paid by the 18th of August 2015.

The gross revenue rose to Rs.26.95 billion from Rs.22.5 billion, while the net revenue rose to Rs.6.5 billion from Rs.5.6 billion.

The company, for the quarter under review paid Rs.20.4 billion to the government of Sri Lanka as excise taxes against and Rs.1.95 billion as income taxes.
The company paid Rs.14.9 billion as excise, VAT and NBT in the same quarter of the previous year with income tax amounting to Rs.1.7 billion.

For the 6 months ended June 30, 2015 (1H15), the company posted a net profit of Rs.5.5 billion up from Rs.4.5 billion recorded in the same period of the previous year.

The gross revenue rose to Rs.52.8 billion from Rs.43.7 billion while net revenue rose 12.9 billion from Rs.10.8 billion.

The total amount of tax paid by the company to the state during the 6 months period stood at Rs.43.7 billion, up 18 percent from the last year.

The company said its estimated Super Gain Tax liability, introduced by the January budget, was Rs.3.8 billion. The Bill is however still pending legislative enactment in Parliament and hence no provision for this had been made in the accounts.  

CTC enjoys a monopoly in the manufacture of cigaretts.The company said the law enforcement authorities continued to effectively curtail the spread of unauthorized and illicit tobacco products.

In the first six months of 2015, a total of 582 raids have yielded 6.3 million illegal cigarettes at a market value of Rs.189 million.

CTC said it complied with 60 percent Graphical Health Warning (GHW) in January 2015 and 80 percent GHW in March with the subsequent amendment to the law. The total cost of implementing GHW for the first 6 months of 2015 is 
Rs.118 million.
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