Ceylon Tobacco Company PLC (CTC) with a 111-year presence in Sri Lanka has pitched its just released annual report on the theme "Beyond the Smoke" to highlight its contribution to the national economy through what is now universally accepted as a highlycontroversial industry.
CTC has stressed in the report that as the country’s only legal cigarette manufacturer, it is the second larges market capitalized company quoted on the Colombo Stock Exchange and is the country’s largest individual tax contributor supporting 178,000 livelihoods through farming, manufacturing and retailing.
In 2016 CTC contributed Rs. 87.4 billion in excise taxes to the national exchequer. Its total tax contribution was a significant 7% of state revenue amounting to 76% of the value generated by the company and is one of the country’s most preferred employers.
"As an organization operating in a controversial industry, we understand the added responsibility placed on us to maintain the highest standards of corporate conduct and take pride in the sustainable and responsible way our operations are run,’’ the report said.
CTC Chairman Susantha Ratnayake said that in the face numerous challenges the company faced in the year under review when the dual impact of a hike in excise duties on cigarettes and the introduction of VAT had a significant impact on affordability of cigarettes, they had delivered strong results.
The company was also hurt by many instances of unlawful enforcement of tobacco regulations with the company’s MD/CEO Michael Koest saying that they will have to take tough decision to find "sustainable ways of operating in such a hostile environment."
Despite all the challenges which has depressed CTC’s share price sharply during the year under review, Ratnayake said that the company had delivered yet another year of strong financial performance with earnings per share up 18.1% to Rs. 67.05 during 2016 with shareholders getting a total return of Rs. 66.80 per share with a final dividend of Rs. 6 per share payable after shareholder approval at the forthcoming AGM.
"Given the health risks associated with our products, we understand that regulation is necessary although we urge the government to pursue balanced and evidenced based regulation which preserve the interests of adult consumers while ensuring the livelihoods of all those dependent on our industry including over 20,000 persons involved in tobacco cultivation," Ratnayake said.
"Tobacco is a legal industry with an undeniable positive socio-economic impact and a major source of income to almost every government in the world."
British American Tobacco Company (BAT) with 83.14% of CTC is the dominant shareholder with no Lankans among the Top 20 shareholders holding the balance. In previous years there were a few Lankans who have obviously sold out in the context of tough regulatory measures including health warnings on packaging and the price stick that had made cigarettes unaffordable persuading them to take available capital gains despite CTC being one of the highest dividend payers quoted on the CSE.
The year under review saw CTC’s share price at a high of Rs. 1,140 and a low of Rs. 797 closing at Rs. 806.50. This compared to the previous year’s trading range of Rs. 1,124 to Rs. 881 closing at Rs. 992.50. The company’s market capitalization was down to Rs. 151.076 billion from Rs. 185.919 billion a year earlier.
The directors of CTC are Messrs. Susantha Ratnayake (Chairman), Michael Koest (MD/CEO), Dinesh Weerakkody, Ms. Premila Perera, Ms. Emma Ridley (Finance Director) Syed Javed Iqbal and Kenneth Allen.
CTC has stressed in the report that as the country’s only legal cigarette manufacturer, it is the second larges market capitalized company quoted on the Colombo Stock Exchange and is the country’s largest individual tax contributor supporting 178,000 livelihoods through farming, manufacturing and retailing.
In 2016 CTC contributed Rs. 87.4 billion in excise taxes to the national exchequer. Its total tax contribution was a significant 7% of state revenue amounting to 76% of the value generated by the company and is one of the country’s most preferred employers.
"As an organization operating in a controversial industry, we understand the added responsibility placed on us to maintain the highest standards of corporate conduct and take pride in the sustainable and responsible way our operations are run,’’ the report said.
CTC Chairman Susantha Ratnayake said that in the face numerous challenges the company faced in the year under review when the dual impact of a hike in excise duties on cigarettes and the introduction of VAT had a significant impact on affordability of cigarettes, they had delivered strong results.
The company was also hurt by many instances of unlawful enforcement of tobacco regulations with the company’s MD/CEO Michael Koest saying that they will have to take tough decision to find "sustainable ways of operating in such a hostile environment."
Despite all the challenges which has depressed CTC’s share price sharply during the year under review, Ratnayake said that the company had delivered yet another year of strong financial performance with earnings per share up 18.1% to Rs. 67.05 during 2016 with shareholders getting a total return of Rs. 66.80 per share with a final dividend of Rs. 6 per share payable after shareholder approval at the forthcoming AGM.
"Given the health risks associated with our products, we understand that regulation is necessary although we urge the government to pursue balanced and evidenced based regulation which preserve the interests of adult consumers while ensuring the livelihoods of all those dependent on our industry including over 20,000 persons involved in tobacco cultivation," Ratnayake said.
"Tobacco is a legal industry with an undeniable positive socio-economic impact and a major source of income to almost every government in the world."
British American Tobacco Company (BAT) with 83.14% of CTC is the dominant shareholder with no Lankans among the Top 20 shareholders holding the balance. In previous years there were a few Lankans who have obviously sold out in the context of tough regulatory measures including health warnings on packaging and the price stick that had made cigarettes unaffordable persuading them to take available capital gains despite CTC being one of the highest dividend payers quoted on the CSE.
The year under review saw CTC’s share price at a high of Rs. 1,140 and a low of Rs. 797 closing at Rs. 806.50. This compared to the previous year’s trading range of Rs. 1,124 to Rs. 881 closing at Rs. 992.50. The company’s market capitalization was down to Rs. 151.076 billion from Rs. 185.919 billion a year earlier.
The directors of CTC are Messrs. Susantha Ratnayake (Chairman), Michael Koest (MD/CEO), Dinesh Weerakkody, Ms. Premila Perera, Ms. Emma Ridley (Finance Director) Syed Javed Iqbal and Kenneth Allen.
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