CTC posts higher 2Q earnings on volume gains and cost cuts

Ceylon Tobacco Company PLC (CTC) reported higher top and bottom-line performances in the quarter ended in June 2025 on higher cigarette volumes sold and also the cost savings initiatives that ran across the company.

The company reported revenues of Rs.55.14 billion for the April-June quarter, its fiscal second quarter, up 9.6 percent from the same period last year.

Higher volume sales have been achieved despite the excise duty-driven price increase in January this year. The volumes lost somewhat in the first fiscal quarter, due to the high prevalence of the smuggled cigarettes, which were available at significantly lower prices. The revenue-based levies, including the excise taxes for the period, were Rs.38.16 billion, up 9.8 percent from the same period last year.

The hefty sales and corporate taxes on tobacco products by the successive governments, which reached a whole new level after the country fell into the economic crisis, have forced people from the company’s cigarettes to cheaper smuggled ones and also other alternatives such as beedi.

Meanwhile, the cost of raw materials used fell by a steeper 32.6 percent to Rs.664 million for the quarter, which the company attributed to the company-wide cost savings initiatives and timing variances.

“The cost base of the company is impacted by the increases driven by inflation and other trade costs, fully offset by the savings initiatives run across the business and timing variance,” the company said in an earnings release.

The company reported earnings of Rs.39.32 a share or Rs.7,365 million for the quarter, up 2.1 percent, from Rs.38.53 a share or Rs.7,217 million in the same period last year.

For the six months ended in June, the company reported earnings of Rs.74.97 a share or Rs.14,044 million, compared to Rs.74.85 a share or Rs.14,021 million in the same period in 2024.

The company meanwhile declared a dividend – its second interim – of Rs.41.00 a share, to be paid by August 27. CTC is one of the most generous dividend pay masters. 

The company booked a corporate income tax of Rs.6,511 million for the quarter, up 35.3 percent from the same period last year.

British American Tobacco International Holdings B.V. holds an 84.13 percent stake in CTC, while Philip Moris Brand SARL holds an 8.32 percent stake, being its second largest shareholder.

The company’s share ended Rs.45.00 or 2.89 percent at trading yesterday to close at Rs.1,600.00.