Sri Lanka’s Ceylon Tobacco unit profits down 7.7-pct in Dec

Feb 20, 2016 (LBO) – Profits at Ceylon Tobacco, a unit of British American Tobacco fell 7.7 percent to 1,834 million rupees in the December quarter, interim accounts showed.

The firm reported earnings of 9.79 rupees per share for the quarter compared to earnings of 10.61 rupees per share posted a year ago.

Gross revenue at Ceylon Tobacco fell 0.16 percent in the quarter to 23.7 billion rupees and government levies dropped at a faster 0.96 percent to 17.7 billion rupees reporting net revenue of 5.9 billion rupees for the quarter, up 2.3 percent a year ago.

In the 12 months to December 2015 Profits at Ceylon Tobacco rose 23.4 percent to 10.6 billion rupees posting a gross revenue increase of 21.1 percent for the quarter.

Ceylon Tobacco has paid 91.6 billion rupees to the Government, in the form of taxes and levies, during the twelve months ended 31 December 2015.

The company said this included Super Gains Tax of 3.8 billion rupees paid during the last quarter of 2015.

“Including Super Gains Tax, the Company’s total contribution to Government revenue increased by 24 percent from 73.6 billion rupees compared to the previous year,”

The company said its top line growth for the year was primarily driven by excise led price increases in October 2014 and October 2015, coupled with recovery in volumes during 2015 driven by mainstream and premium segments.

“However, under regulated and low taxed products such as “Beedi” still remains a key threat to Government revenue contribution from the tobacco industry.”

According to Ceylon Tobacco, in the twelve months, a total of 1,819 raids have uncovered 21.6 million illegal cigarettes at a market value of 648 million rupees.

The Directors of the company have recommended a final dividend of 3.70 rupees per share for 2015 subjected to necessary approvals.