Govt. inhales Rs.48bn tax from fags in first 9 months

Ceylon Tobacco Company (CTC) increased its contribution to government earnings in the first nine months of 2012 by 9% to Rs. 47.8 billion, despite cigarette volumes continuing its declining trend with a drop of 2.6% over the same period last year.

The Company’s profit after tax stood at Rs. 6.2 billion, driven by one-off improvements in Other Operating Expenses, which includes gains on USD deposits and the lack of contribution to the gra- tuity fund over the same period last year due to a surplus in the fund. In addition, net interest income has also improved and the Company is aggressively pursuing its cost savings drive in every sphere.

Growth was recorded in the business’ premium segment; up 55% driven by its innovative variant Dunhill SWITCH, which now accounts for 47% of the Dunhill portfolio. Export volumes are up 78% off a small base, with revenues up to Rs. 70 million. The effective crackdown by authorities on illicit and unauthorised products continue, with over 679 raids yielding 43 million illegal sticks valued at Rs. 946 million.

Following the petition filed by Ceylon Tobacco Company against the gover nment gazette published by the Ministry of Health on packaging and labeling regulations of tobacco products, the implementation of the new laws were deferred until November 22 when the case would be taken up again. Subsequently, the Ministry on Thursday 8th November extended the i mplementation date until 1 March 2013 by Gazette Extraordinary no. 1783/16.

CTC’s flagship CSR initiative, the Sustainable Ag ricultural Development Programme (SADP), continues to empower livelihoods of underprivileged families in rural Sri Lanka. The total number of beneficiaries in this programme has grown to 11,864 families or 44,309 persons across 14 districts. So far 8,071 families have successfully completed the programme and are enjoying the benefits of reaching economic self-sufficiency in a sustainable manner.

The Directors recommend a third interim dividend of Rs. 12.10 per share and will be paid on the 3rd December 2012.