Despite the decline in the number of smokers in the country as well as a drop in the average daily cigarette consumption levels, the Ceylon Tobacco Company (CTC) has posted an after-tax profit of Rs.1.08 billion, up 13.5% from a year earlier, in the nine months to Sept. 30, 2007.

The company has already paid its shareholders three interim dividends totaling Rs.5.50 per ten-rupee share for the period under review and the directors have told shareholders that they are ``confident of delivering a satisfactory return for the year ending December 30, 2007.’’

Industry volume had continued to decline during the period under review with excise led price increases together with the effect of new tobacco regulations implemented in December last year pushing down CTC’s total sales volumes.

"During the period under review total government levies inclusive of Provincial Council taxes grew by Rs.2,735 million reflecting the impact of excise led price increases, the increased Provincial Council Tax from 1% to 5% and the improved product mix," the company said in a performance review.

"Additionally, effective enforcement of law by the authorities in curbing the growth of counterfeit and smuggled cigarettes too contributed in protecting the government’s revenue base."

This year the authorities had carried out more than 462 raids and over Rs.160 million worth of counterfeit and smuggled cigarettes had been confiscated and destroyed.

During the period under review, the company’s cost base had grown by 16.5% from the comparative period the previous year.

This was directly attributable to the cost of new brands/product launches and the increased investments in trade marketing and distribution.

"However the company achieved cost savings through enhanced operating efficiencies from the organizational restructure carried out in the previous year coupled with currently running company-wide productivity improvement initiatives," CTC said.

It said that CTC continues to direct its key corporate social responsibility initiative through a sustainable agricultural development program which has been a proven concept of poverty alleviation.

This program has now been extended to touch the lives of over 1,600 families who are currently living below the poverty line, out of which approximately 1,500 families have reached self sustainable livelihood.

CTC had a stated capital of Rs.1.87 billion, reserves of Rs.15 million and retained earnings of Rs.745 million in its books as at September 30, 2007.

Group net assets value per share had grown to Rs.14.06 from Rs.13.20 a year earlier and the CTC share traded at a high of Rs.60 and low of Rs.54 during the period under review. This compared with a trading range of Rs.65 to Rs.52 a year earlier.