COVID third wave cuts CTC revenue, profit by 28%

Ceylon Tobacco Company PLC (CTC) yesterday announced a 28% reduction in third quarter top and bottom line due to the COVID pandemic third wave-induced restrictions.

Turnover in 3Q was Rs. 31.7 billion, down by 28% from Rs. 44.5 billion a year ago. Profit before income tax in 3Q was Rs. 6.2 billion, down by 27% from Rs. 8.5 billion a year ago. After tax profit was Rs. 3.8 billion as against Rs. 4.9 billion.

However, in the first nine months, pre-tax profit remained almost unchanged at Rs. 19.3 billion. After tax profit amounted to Rs. 11.6 billion, down from Rs. 12 billion. First nine months turnover was Rs. 96.5 billion, down from Rs. 103 billion.

CTC said its performance in the three months ended 30 September was impacted by the movement restrictions imposed from mid-August till end-September on account of the COVID pandemic’s third wave.  

“Consequently, CTC’s overall sales volume, turnover and Government revenue through excise and other levies reduced in comparison to a year ago,” the company added.

Government levies declined by 30% to Rs. 23.6 billion in 3Q and by 7.4% to Rs. 72.3 billion in the first nine months.

CTC said it had managed to continuously review its cost base for optimisation to deliver profitability and sustainable value to shareholders.

CTC Directors have recommended a third interim dividend of Rs. 15 per share to be paid by 10 December. Previously it paid a first and second interim dividend of Rs. 19 each per share.

The company also said it remains committed towards the continuation of business activities, subject to strict compliance with employee health and safety guidelines and other directions of the Government. The CTC also said it was cautiously optimistic of the future in anticipation of effective management of the pandemic and gradual revival of the economy.