TCC records 10 percent rise in net profit

Dar es Salaam. The net profit for Tanzania Cigarette Public Limited Company (TCC Plc) rose by 10 percent during the first half of 2021, thanks to an improved business environment in the tobacco industry, and recovery from the Covid-19 pandemic woes.

In its unaudited financial results for the six months to June 30, 2021, the tobacco company revealed that it earned Sh23.9 billion, up from Sh21.6 billion that it earned in the first half of last year (2020).

The TCC board chairman, Mr Paul Makanza, said there was also an improvement in its sales volumes, and success in the cost/efficiency strategies adopted by the company.

“Operating costs remained constant, reflecting operational efficiencies in all business areas and the need to preserve cash in uncertain times,” he said.

Last year, the company’s profits fell by 19 percent, dropping to Sh21.6 billion from the Sh26.6 billion recorded in a similar period in 2019. This was as Covid-19 impacted the trading environment, consumer incomes and spending patterns, resulting in cigarette sales dropping.

Amid the global Covid-19 pandemic, smokers were also cautious, and followed statements by the World Health Organization (WHO) that tobacco smoking was a known risk factor for many respiratory infections - and that it increases the severity of respiratory diseases.

TCC is now optimistic that the positive momentum seen in 2021 will be sustained as the business environment continues to improve - and, also, that the government’s recently announced measures to spur economic growth would prove to be effective.

“The directors are cautiously optimistic about the second-half yearly results, to December 31, 2021,” said Mr Makanza.

According to him, TCC was able to improve its domestic and export volumes by 16.5 percent and 3.7 percent respectively, as the trading environment recovered. The company generated Sh43.2 billion in operating cash flow to June 30, 2021, out of which Sh12.7 billion was used to pay corporate income tax and the final gross dividend of Sh30 billion for the year to December 31, 2020, he says.

For the half-year to June 30, 2021, the manufacturer approved a final gross dividend of Sh250/share to shareholders... Same as last year.

Mr Makanza said “The board of directors approved an interim ordinary gross dividend of Sh250 per share, as well as a special dividend of Sh250 per share.”

Shares will trade cum-dividend until September 07, 2021.