Financial Times

CTC revenue to the government up 14 %
Ceylon Tobacco Co (CTC) said last week its contribution to government coffers through direct government levies totalling Rs. 31.9 billion, up 14.2%, from 2004 revenue levels was over 9.5% of total state revenue.

“This is mainly as a result of the growth in CTC’s volume and the impact of excise led price increases. The growth of illicit products is a threat to the legal industry and poses the single biggest challenge in delivering government revenue growth into the future,” the company said in a statement.

CTC recorded a profit before interest and tax of Rs. 1,803 million which reflects a growth of 16.6% over 2004. It said the growth was as a result of increased sales volume due to the effective law enforcement imposed on illicit cigarettes and the growth of CTC’s international brands, Benson & Hedges and JPGL.

During the year CTC also maintained its focus on numerous cost reduction and productivity initiatives and also reaped the benefits of such initiatives launched in the past which has, contributed significantly in managing costs. After tax profits amounted to Rs 1.2 million, up 16.1% over 2004.

“Continued excise-led price increases are making legal products unaffordable to consumers which creates an atmosphere conducive for the growth of illicit products. CTC will continue to focus on curbing illicit products in partnership with the law enforcement authorities in order to deliver government revenue growth whilst safeguarding industry volumes. Further, in the light of the developments in the regulatory environment, emphasis will be on encouraging and supporting regulation which is fair, sensible and enforceable,” the statement added.

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