Sri Lanka sees low cigarette sales in the third quarter of 2024, as its main tobacco manufacturer struggles with higher prices and excise duties in a market replaced by smuggled cigarettes.

According to Ceylon Tobacco Company (CTC) PLC’s quarterly financial statements, the company’s sales volume during the three months ended 30 September was lower than in the same period last year.

CTC has recorded a volume sale of 1.39 billion cigarette sticks in the first nine months of 2024 compared to 1.74 billion in the same period in 2023.

“The decline in the volume is consequential to the successive price increases in excise duty and other taxes over the last two years,” CTC said in their financial statement.

Moreover, it said that due to the excessive price increases the illegal or smuggled cigarette share has increased in the market significantly in 2024.

Therefore, the company took steps to export tobacco leaf which partially mitigated the loss in overall turnover.

The turnover in the first nine months of 2024 stood at Rs. 148.3 billion compared to Rs. 146.6 billion in 2023.

CTC said that the company’s cost base is adversely impacted by the increases in raw material costs driven by inflation as its raw material cost surged to Rs. 2.89 billion as of the end of Q3 2024 compared to Rs. 2.48 billion in the same period in 2024.

However, the company’s profit-before-tax for the three months ended 30 September stood at Rs. 12.9 billion, while the profit-after-tax for the same period was Rs. 7.7 billion.