Business
Ceylon Tobacco Company PLC: Fags ignite bottom-line boost
Gross Revenue of CTC is estimated to accelerate to achieve a CAGR of 6% during the period 2022E2024E mainly attributing to continuous price hikes and swift bounce back in the tourism sector which was significantly curbed since 2020. Gross Revenue of CTC is expected to enhance in 2022E amidst the current economic crisis on account of VAT rate hike by 4.0%, which consequently increased the price of a cigarette by LKR 5.00 reflecting a rise in price by 6.3%-7.1% in major brands of CTC. In line with the past trend, we anticipate an annual tax hike in cigarettes resulting in further price hikes which will be far greater than the tax increase as the pricing power the company holds as the Tobacco Monopolist allows to pass on such increases to the consumer. We estimate the Gross Revenue of CTC to set on a marginal growth of 1.2% to LKR 135.9Bn in 2022E compared to LKR 134.4Bn in 2021, with volumes reacting negatively to the unfavourable economic climate. However, growth in turnover would expedite in 2023E as turnover is expected to rise by 5.3% to LKR 143.3Bn and by 6.4% to LKR 152.5Bn in 2024E with easing economic conditions improving purchasing power of consumers and positive developments in the political front and expected financial assistance from external parties bringing in hope for revamp in tourism and recovery of volumes.
It is expected for CTC’s margins (Net Revenue/Gross Revenue) to increase narrowly to 25.1% for 2022E while reaching 26.5% for 2023E (+146bps) and 28.4% for 2024E (+186bps). Moreover, operating profit margin of CTC too is expected to increase marginally to 78.0% in 2022E compared to 77.7% in 2021 (+30bps). A possible shift in demand from domestic consumers to low margin products from high margin products and an overall decline in volumes coupled with a probable rise in demand for illicit beedi market as a result of depleting disposable income has a potential of hampering margins of CTC in the short term. However, the potential negative impact from this is offset by the escalation indemand for high margin products of CTC owing to the revival in the tourism sector in 2022 with tourist arrivals expected to rise beyond 800,000 by the end of 2022 while it has already crossed the 400,000 level for the period of January-June for the first time after 2019. Although, we expect volumes to decline by 12.0% in the current financial year, volumes would normalize by 2023E as the demand for cigarettes is expected to rebound due to its inelastic nature following the past trend of consumers adjusting to price hikes at a rapid pace. Thus, bottom line of CTC is expected to grow by 2.1% in 2022E and record at LKR 16.5Bn while it is expected to grow at 10.7% in 2023E recording an earnings of LKR 18.2Bn.
CTC is more likely to maintain its average payout of c.90.0% in order to repatriate profits to its parent company British American Tobacco which owns 84% of CTC while providing a dividend yield of 13.4% and 14.8% in 2022E and 2023E respectively.
In FY22E, we expect CTC to record a profit of LKR 16.5Bn (2%YoY) while FY23E net profit is expected to record at LKR 18.2Bn (11%YoY). For FY22E, CTC is expected to deliver a total return of 94.3% including a DY of 13.4% while for FY23E a total return of 103.8% is expected inclusive of 14.8% DY.
-First Capital Research
Business
SLT-MOBITEL driving Sri Lanka’s economic resilience through digital infrastructure
Corporate accolades underscore the alignment between its operational excellence and national development
In an era where national competitiveness is intrinsically tied to digital connectivity, strengthening the country’s digital backbone has become an urgent priority. Within this context, the evolving role of Sri Lanka’s leading telecommunications provider, SLT-MOBITEL, offers valuable insight into how technological infrastructure can underpin broader economic resilience.
Telecommunications and digital networks are foundational to economic transformation. By expanding high-speed broadband access, upgrading enterprise cloud capabilities, and bridging the urban-rural connectivity divide, SLT-MOBITEL helps reduce business transaction costs, streamline supply chains, and enable micro, small, and medium enterprises to reach global markets.
Recent corporate accolades further underscore this alignment between operational excellence and national development. SLT-MOBITEL’s triple triumph at the National Business Excellence Awards 2026 – winning in the Infrastructure and Utilities sector, Performance Management, and ICT Services categories – highlights its growing impact. Notably, the recognition of eChannelling’s contributions to digital healthcare reflects a broader strategic pivot toward integrated technology solutions.
“Institutional efficiency of this nature is critical for attracting foreign direct investment, as global partners increasingly assess a country’s digital maturity and systemic stability before committing capital,” noted industry observers.
Moreover, the company’s transition from a conventional telecom utility to a comprehensive digital solutions provider aligns seamlessly with Sri Lanka’s national digitalisation agenda. As the country pursues public sector modernisation, enhanced e-governance, and a competitive knowledge economy, the private sector must step up to deliver secure, scalable, and future-ready networks. Investments in data centres, cybersecurity frameworks, and advanced ICT infrastructure act as strategic buffers, ensuring that Sri Lanka’s economic apparatus remains agile and resilient amid future global uncertainties.
However, industry experts caution that while these achievements are commendable, SLT-MOBITEL still has a considerable distance to cover in fully enabling a truly digital economy.
Business
Port City Colombo strengthens Gulf investment ties at Dubai diplomatic engagement
Port City Colombo (PCC) took a prominent role as Platinum Sponsor at the second edition of Sri Lanka Beyond Your Dreams, a high-level diplomatic and investment engagement hosted by the Consulate General of Sri Lanka in Dubai and the Northern Emirates. The event, held on 2nd September 2026 at the Hilton Dubai Al Habtoor City, brought together over 400 senior UAE-based business leaders, investors, diplomats, and institutional stakeholders, alongside Sri Lanka’s most senior government representatives.
The gathering was graced by Dr. Thani bin Ahmed Al Zeyoudi, UAE Minister of Foreign Trade, as Guest of Honour, and Vijitha Herath, Sri Lanka’s Minister of Foreign Affairs, Foreign Employment and Tourism. A high-level Sri Lankan delegation – including the Secretary to the Prime Minister, the Chairman of the Board of Investment, the Chairman of the Export Development Board, and the Director General of Commerce – underscored the government’s strong commitment to deepening economic diplomacy with the UAE.
In his keynote address, Minister Herath reaffirmed the centuries-old ties between Sri Lanka and the Arab region, emphasising the UAE’s vital role as a key economic partner. He stressed the urgency of finalising a Comprehensive Economic Partnership Agreement (CEPA) with the UAE, which would establish a robust framework to elevate trade, investment, and bilateral cooperation. Declaring Sri Lanka “open and ready for business,” he positioned Port City Colombo as the physical embodiment of this economic mission – a modern Special Economic Zone (SEZ) with a dedicated legal framework and competitive incentives, offering UAE investors a natural gateway to South Asia while maintaining strong Gulf connectivity.
Business
American Premium Water strikes Gold at Dragons of Sri Lanka 2026
American Premium Water has secured four wins at Dragons of Sri Lanka Awards 2026, including three Gold Dragons and one Black Dragon, marking a significant milestone for the brand following its relaunch last year.
Part of the prestigious Dragons of Asia awards, Dragons of Sri Lanka brings the program’s regional platform to the local market, celebrating creative and effective marketing communications, with entries evaluated on strategic thinking, creativity, execution and impact. Established in 2000, Dragons of Asia is one of Asia’s premier results-driven marketing awards programs.
For American Premium Water, the achievements are particularly significant given that the company’s debut at the Dragons awards has resulted in four Dragons across four categories. In the distinction of Gold Dragons, American Premium Water was recognized across three categories including Product Launch or Re Launch, Cause, Environment or Sustainability and Creative Excellence while the Black Dragon was awarded in recognition of Small Budget.
Competing alongside leading brands and agencies in Sri Lanka, American Premium Water’s four wins demonstrate the strength and effectiveness of its recent work. Winning three Gold Dragons across three distinct categories highlights the breadth of the brand’s achievements, while the Black Dragon for Small Budget further emphasizes its ability to create meaningful impact through focused and efficient investment.
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