Ceylon Tobacco Company PLC: Latest Financial Performance and future outlook

Ceylon Tobacco Company PLC’s latest financial performance for the year ended 31 December 2023, as reported in their annual report, indicates the following:

Financial Performance and Profitability:

  • Turnover increased by approximately 20% to Rs. 200,019 million in 2023 from Rs. 167,194 million in 2022.
  • Profit after tax rose by 35% to Rs. 27,656 million in 2023 from Rs. 20,469 million in the previous year.
  • Profit before tax was Rs. 46,140 million in 2023, a 34% increase from Rs. 34,393 million in 2022.

Key Ratios:

  • Earnings per share (EPS) increased by 35% to Rs. 147.64 in 2023 from Rs. 109.27 in 2022.
  • Net assets per share decreased by 33% to Rs. 62.80 in 2023 from Rs. 93.38 in 2022.
  • The market price per share rose by 53% to Rs. 953.75 in 2023 from Rs. 625.00 in 2022.
  • The price-earnings (P/E) ratio decreased to 6.46 times in 2023 from 5.72 times in 2022, indicating a higher growth in share price relative to earnings growth.
  • Dividend per share saw a significant increase of 237% to Rs. 178.10 in 2023 from Rs. 29.00 in 2022.

Future Outlook:
The company’s future developments are discussed in the reviews by the Chairman, the Managing Director & CEO, and the Finance Director. The Sri Lankan economy is showing signs of recovery with the stabilization of key economic indicators. Ceylon Tobacco Company PLC is optimistic about the improvement of market conditions for their business in the medium term. However, they are also aware of the challenges posed by shifting consumer preferences, competitive pressures, and evolving regulatory requirements.

It is important to note that while the company has shown strong financial performance, the net assets per share have decreased, which may need further analysis. Additionally, the company’s focus on Environmental, Social, and Governance (ESG) initiatives is a significant part of their strategy, which could influence their long-term sustainability and market position.

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