CTC contributes Rs. 21.3b to Government coffers
In the first quarter of 2015, Ceylon Tobacco Company (CTC)
contributed Rs. 21.3 billion to the Government, an increase of 20% in
comparison to the corresponding period last year primarily driven 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. During the
first quarter we continued to see a volume growth in the beedi segment.
The volume growth in un-regulated low priced products such as beedi
remains a key risk to government revenue contribution from the regulated
cigarette industry. 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
six 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. The company complied with 60% pictorial health warning from
January 1, 2015 as needed by the regulations.
As a manufacturer, the company also complied with the subsequent
change to the law needing 80% pictorial health warning, while the law
has provided a grace period to exhaust existing stocks until June 1,
2015.
The total cost of implementing GHW for Q1 is Rs. 118 million.
CTC remains committed to invest into our key brands and predominantly
to infuse value in our main-stream 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. CTC's flagship CSR initiative, the Sustainable Agricultural
Development Program (SADP) continued to focus on alleviating poverty and
empowering the livelihoods of families in rural Sri Lanka.
The number of active families supported by the company as at March
2015 stood at 17,464, comprising of 67,307 beneficiaries in 16
districts. The company's estimated liability of the Super Gain Tax as
proposed in the interim budget is 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. The Directors recommend a first interim dividend of Rs. 3.45
per share to be paid by May 28, 2015. |