Ceylon Tobacco 2Q topline up, profit down

Ceylon Tobacco Company PLC (CTC) has reported a slight recovery in second quarter of FY22 from the prolonged impact of COVID-19 pandemic in comparison to a year earlier. 

Turnover grew by 41% to Rs. 42.3 billion and the Government revenue through Excise and other levies rose by 44% to Rs. 32 billion.

The company’s profit before income tax for the period recorded Rs. 6.4 billion as against Rs. 6.3 billion a year ago, while the company’s profit after tax for the three months ended 30 June 2022 reported as Rs. 3.4 billion down from Rs. 3.9 billion a year ago.

In 1H, turnover grew to Rs. 79.3 billion from Rs. 64.7 billion and Government levies amounted to Rs. 60 billion as against Rs. 48.7 billion a year ago. Pre-tax profit in 1H was Rs. 13.2 billion, marginally up from Rs. 13 billion in 1H of FY22. After tax profit declined to Rs. 7.6 billion from Rs. 7.8 billion.

CTC said with the Surcharge Tax Act, No. 14 of 2022 passed on 8 April 2022 as a one-off tax and as per Section 2 of the Act, the company is liable for a Surcharge Tax of Rs. 6.3 billion. The first instalment of Surcharge Tax amounting to Rs. 3.1 billion was paid on 20 April 2022 and a partial advance payment of Rs. 1.4 billion from second instalment was made on 29 June 2022.

The Directors have recommended a second interim dividend of Rs. 10 per share to be paid by 12 September 2022. A similar dividend was paid as interim dividend. In FY21, the first and second interim dividends amounted to Rs. 19 per share.