May 13, 2015 (LBO) – Sri Lanka’s Ceylon Tobacco Company’s sales volumes increased 11 percent during the quarter which could be attributed to a higher level of consumer confidence and an increase in disposable income, the company said in its interim report.
“During the first quarter we continued to see a volume growth in the Beedi segment,” the company said.
The volume growth in unregulated 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 unauthorized and illicit tobacco products.
In the first three months of 2015, a total of 249 raids have yielded 6 million illegal cigarettes at a market value of 180 million rupees.
However the cigarette maker added 21.3 billion rupees to the Government’s revenue in the first quarter of 2015, an increase of 20 percent in comparison to the same period last year primarily driven by an excise led price increase experienced in October 2014 and higher volumes.
Revenue before tax grew 22.24 percent to 25,916 million rupees in the March 2015 quarter and net revenue increased 21.17 percent to 6,353 million rupees.
Profits before tax rose 26.10 percent 4,318 million for the quarter and net profits up 22.9 percent to 2,490 million rupees.
The Company’s export sales revenue has increased by 35.4 million rupees for the quarter.
The Company’s estimated liability of the Super Gain Tax as proposed in the interim budget is 3.8 billion calculated at 25 percent of the taxable income for the year of assessment 2013/2014.
However, the Bill to impose the tax is still pending parliamentary approval.