Ceylon Tobacco Company PLC (CTC) contributed Rs.15.3 billion towards government levies during the first quarter of 2012, over Rs 14 billion during the same period last year.
Gross turnover in the company increased to Rs.19.8 billion during the quarter over the previous year’s Rs.18.1 billion whilst CTC’S net profit was recorded at Rs 1.5 billion, from an earlier Rs 814 million. Improved profits were partially credited to reduced operating costs of Rs 1.2 billion, down from Rs.1.91 billion previously, and despite an increase its income tax expenses from Rs.568 million to Rs.1 billion during the quarter.
The reduction in operating costs was however largely down to one-off factors such as the lack of a gratuity provision as a result of a surplus in the company’s benefit plan, as well as a timing difference in CSR related expenses, and cost cutting initiatives
The company’s operating expenses are expected to grow as the timing variance in expenses gets adjusted, according to a statement from the company.
Earnings per share for the quarter stood at Rs.7.95 up from Rs.4.34 last year.
CTC’S improved contribution towards government levies followed a Rs.1 increase in the cost of a cigarette effective from March 30 this year.
Overall CTC paid Rs.66 billion in taxes for the whole of 2011, a staggering Rs 9.5 billion improvement over the previous year.
The opening up of new markets in the North and East, alongside law enforcement action to curtail the sale of illegal cigarettes helped to boost company profits in 2011, with over 76 million illegal sticks confiscated, at an estimated value of Rs.1.2 billion.