CTC March profits up on higher cigarette sales

Monopoly cigarette operator Ceylon Tobacco Company PLC (CTC) recorded higher top and bottom-line growths for the quarter ended on March 31, 2022 (1Q22), amid the growth in cigarette sales, recording a slight recovery from the prolonged COVID-19 impact.

CTC said its sales volumes increased by 5 percent during the quarter under review from a year ago. As a result, the company recorded a turnover of Rs.37 billion, compared to Rs.34.8 billion a year ago.

Higher cigarette sales also raised taxes to the government, as CTC paid Rs.27.8 billion in government levies during the quarter under review, up from Rs.26.4 billion a year ago. The company reported earnings of Rs.22.35 per share or Rs.4.2 billion for the January-March 2022 period, compared to earnings of Rs.20.92 a share or Rs.3.9 billion in the year earlier period. 

The directors recommended a first interim dividend of Rs.10.00 per share to be paid by June 13, 2022. 
Meanwhile, CTC said it paid Rs.3.1 billion as Surcharge Tax on April 20, 2022. The company has another Rs.3.1 billion to be paid as Surcharge Tax in July 2022. Surcharge Tax is a one-off, retrospective tax introduced by the last budget on companies and individuals who earned over Rs.2 billion in 2020/21.   The new government under Prime Minister Ranil Wickremesinghe is likely to bring in a new budget shortly and the taxes on cigarette and alcohol are tipped to be increased sharply to bolster the state coffers.