Government gets over Rs. 30b from CTC in 2005

Ceylon Tobacco Company contributed 31.6 Billion rupees to the government in 2005, meeting 10% of government revenue and an increase of 14.2% over 2004.

This is mainly attributed to increased excise rates on cigarettes and raids carried out by law enforcement authorities to minimise the presence of smuggled and illicit cigarettes in the market.

The company recorded a profit before interest and tax of Rs. 1,803 Million, a growth of 16.6% over 2004.

The growth in profit is 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. Profit after Tax amounted to Rs. 1,256 mn which is a growth of 16.1%, over 2004.

CTC's 31.6 Billion rupees revenue generation to the government comes in the wake of several price increases.

In 2005 prices were increased in April, November and December.

The growth of 14.2% in revenue to government is evident through CTC and law enforcement authority's efforts in adopting effective strategies to minimise the impact of counterfeit and illegal trade of cigarettes.

The estimated volumes of these illegal products have seen a decline during the period under review. Last year 571 Raids were carried out by Customs, Excise and Police with Over 80 Million illegal cigarettes (In 2004, 23 Million illegal Cigarettes were confiscated) being confiscated, enabling the company to sell more of the legal product in the market thus generating further income for the government.

"In comparison to previous years CTC has delivered on government tax revenue beyond expectations.