COLOMBO:Profits of Ceylon Tobacco Company Plc, a unit of British American Tobacco, more than doubled to 4.5 billion rupees in the December 2017 quarter, from a year earlier despite shrinking cigarette sales, interim accounts showed.
The company said cigarette volumes fell 18 percent during 2017 after price hikes. But turnover tax revenues rose to 107.3 billion rupees from 89.77 billion rupees a year earlier up 19.5 percent. Sri Lanka charges excise, and other levies including a 15 percent value added tax.
The company and its customers coughed up a total of 117.3 billion rupees in taxes to the state, which includes income tax in 2017.
CTC reported earnings of 24.01 rupees a share for the quarter. In the 12 months to December, earnings were 77.87 rupees a share on total profits of 14.6 billion rupees, increasing 15 percent from a year earlier, interim accounts showed.
Sales volumes fell 18 percent during the year on lower disposable incomes and taxes on cigarettes, the company said. Ceylon Tobacco shares closed Wednesday at 1,049.50 rupees. Revenue with taxes in the quarter increased 60 percent to 35.6 billion rupees.
The total tax collection on cigarettes amounted to 27.5 billion rupees in the quarter, up 86 percent from a year earlier. Operating expenses tumbled 65 percent in the quarter to 1.2 billion rupees.
Raw materials cost was down to 246 million rupees from 349 million amid lower volumes, salaries and wages were down to 449 million from 549 million, and other operating expenses were down to 1.2 billion rupees from 3.4 billion.
The company said high domestic prices maintained with taxes were promoting cigarette smuggling.
“The smuggled cigarette market is estimated to be over 450 sticks,” the company claimed. It did not say how the estimate had been arrived at.
