Govt. revenue gets Rs. 7.8 b boost from CTC

Monday, 3 August 2015 00:00 - - {{hitsCtrl.values.hits}}

Ceylon Tobacco Company (CTC) said it has contributed Rs. 43.7 billion to the Government as excise and other taxes during the first six months ended 30 June 2015. This is an increase of Rs. 7.8 billion, 18% in comparison to the same period last year.

This was primarily driven by an excise-led price increase experienced in October 2014 along with higher volumes during the first six months of 2015. The increase in domestic volumes of 10% as at the end of the second quarter could be attributed to a higher level of consumer confidence and an increase in disposable income.

Law enforcement agencies continued to effectively curtail the spread of unauthorised and illicit tobacco products and in the first six months of 2015, a total of 582 raids have yielded 6.3 million illegal cigarettes at a market value of Rs. 189 million.

The company’s Profit after tax stood at Rs. 5.5 billion for the six months ended 30 June 2015. The company complied with the regulation on 60% Graphic Health Warning (GHW) in January 2015 and 80% GHW in March with the subsequent amendment to the law. The total cost of implementing GHW for the first six months of 2015 was Rs. 118 million.

“For us, the most significant change during the period under review was the implementation of the GHW. I am extremely pleased with the results of the first half of the year despite the challenges we faced, including the implementation of 60% warnings on the front and back pack facings which was later increased to 80%. We planned extensively for the timely rollout of the new packaging formats and we delivered in every aspect of the regulators requirement. We continued to demonstrate our commitment to not only our shareholders, but to wider stakeholders,” said CTC Managing Director and Chief Operating Officer Felicio Ferraz. He also commended the Sri Lanka Customs for their support and efforts in the nations’ endeavor to curtail illicit cigarettes.

The company also reiterated its commitment to invest into its key brands and predominantly to infuse value in mainstream brand John Player Gold Leaf.

CTC’s flagship CSR initiative, the Sustainable Agricultural Development Programme (SADP), continued to focus on alleviating poverty and enabling the livelihoods of families in rural Sri Lanka. The total number of active families supported by the company as at end June 2015 stood at 17,464, comprising 67,307 beneficiaries in 16 districts. SADP was also recognised as the winner in the Social Empowerment Category at the Asia Responsible Entrepreneurship Awards 2015 held in Macau, China.