Pakistan Tobacco Company

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Financial Analysis

Pakistan Tobacco Company (PTC) has maintained its growth momentum during the year; scaled new heights with the achievement of milestones and made significant progress in every facet of the business. This is especially pertinent as the Company has embarked upon the 61st year of its operations in Pakistan.
 

PTC has achieved record level of sales and profitability during the year. Operating profit grew by 29% to Rs 3,973 million and profit after tax grew by 27% to Rs 2,413 million. Company’s contribution to the Government’s revenue was an unprecedented amount of over Rs. 26 billion, an increase of approximately 15% over the last year. Where as the sales volume, at 37.2 billion sticks, grew by 8% during the year ahead of the industry growth that was estimated at 2%. Market share also grew by 1.7 percentage points, further strengthening company position as the market leader in the domestic tobacco industry.  

Business Performance

The following summary of key financial results depicts the Company’s outstanding performance as compared to 2006.



The main drivers of this strong financial performance were higher sales volumes, operational efficiencies and effective cost control measures.
 

Sales Performance

The Company made significant progress in volume growth during 2007 delivering a record sales volume of 37.2 billion sticks, an increase of 8% in comparison to 2006. Continued focus on innovation, understanding of consumer, superior quality product, and effective marketing activities led to strong organic growth in their brand portfolio.

Gold Flake remained the volume leader with a 16% growth over 2006. The pack change on Capstan by Pall Mall was well received by the market and the brand continued to maintain its position as consumers’ first choice in the medium price segment. JPGL, in its key role as value driver, achieved 8% volume growth in the same period. The decline in Embassy was mainly due to the switching done by it's consumers to Gold Flake and by the increased pressure from the lower priced brands of the illicit sector.
 

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