Ceylon Tobacco Company PLC (CTC) has boosted its 9-month profit after-tax by Rs.413 million despite sales volumes dipping as a result of cigarettes being less affordable to smokers due to excise-led price increases.

"The company’s total sales volume was also lower in comparison to the same period last year; but market share improved at the expense of counterfeit and smuggled cigarettes," CTC said in an interim report covering the 9-month period ended September 30, 2008 when revenue was up to Rs.40.8 billion and the profit after-tax to Rs.1.5 billion with government levies also increasing by Rs.4.8 billion to Rs.34.3 billion.

The CTC statement said that the company continued to invest in Dunhill and Pall Mall brands that have done well up to date.

It said that the law enforcement authorities had continued to assist in containing the growth of counterfeit and smuggled cigarettes with 370 raids carried out in the last nine months and over Rs.256 million worth of counterfeit and smuggled cigarettes confiscated and destroyed.

The significant increase in government revenue from its levies on the tobacco industry was attributed by CTC both to the excise-led price increases and a better brand mix.

CTC has continued to rationalize distribution, further localizing material inputs into its products including leaf tobacco. On-going organizational restructuring had also continued to deliver significant savings to date, the company said.

"These productivity improvements, coupled with a better brand mix and sales value contributed to the company’s profit after tax increase of Rs.413 million for the period," the statement said.

CTC also said that its corporate social responsibility initiative supporting a sustainable agricultural development program has been extended to 2,800 families from 1,600 last year. 134 families have exited the program after attaining self-sufficiency.

Shareholders have been paid a third interim dividend of Rs.3.13 per share earlier this month on top of a first interim dividend of Rs.1.85 per share and a second interim of Rs.2.77 per share. Dividends paid up to now total Rs. 7.75 per share, among the highest paid by companies quoted on the CSE.

"Your board remains confident of delivering a satisfactory return to shareholders for the year ending 31st December 2008," shareholders were told.

CTC has a stated capital of Rs.1.87 billion, capital reserves of Rs.15 million and retained earnings of Rs.1 billion in its books.

Net assets per share had grown to Rs.15.46 in September, 2008 from Rs.14.06 a year earlier and the share traded in the third quarter at a high of Rs.80 and a low of Rs.65.75. This compared with a trading range of Rs.60 to Rs.54 during the comparative period the previous year.

The directors of CTC are: Messrs. J. Bandaranayaake (Chairman), M. Ali Khan (MD/CEO), Vijaya Malalasekera, Mobasher Raza, Bruce Jalleh, P.D. Rodrigo, Susantha Ratnayake and Ariyaratne Hewage.