ITC Net Income Rises 19% After Cigarette Sales IncreaseMalavika Sharma
ITC Ltd., Asia’s second-biggest tobacco company by market value, reported fourth-quarter profit climbed 19 percent as cigarette sales increased.
Net income for the maker of Wills cigarettes and Bingo snacks rose to 19.3 billion rupees ($352 million) in the three months ended March from 16.1 billion rupees a year earlier, the Kolkata-based company said. That compares with the 19 billion-rupee median of 31 analysts’ estimates compiled by Bloomberg.
ITC, which is 31 percent owned by British American Tobacco Plc, raised some cigarette prices in the quarter after excise taxes were increased in India’s annual budget unveiled in February. Net income expanded at the slowest pace since the quarter ended June 2009 as profit before tax at its hotels and papers businesses declined from a year earlier.
Net sales increased 19 percent to 81.8 billion rupees. That compares with the 79.9 billion-rupee median of 29 analysts’ estimates compiled by Bloomberg.
Shares declined 0.6 percent to close at 334.90 rupees in Mumbai. The stock has gained 17 percent this year, compared with a 4.4 percent advance in the benchmark S&P BSE Sensex.
Profit before tax for the cigarettes segment rose 20 percent to 21.1 billion rupees, while net sales increased 11 percent to 36.2 billion rupees, the company said.
The consumer goods business, which includes Bingo packaged snacks and Fiama di Wills shampoo, reported its first-ever profit before tax of 118.7 million rupees, compared with a loss of 166.8 million rupees in the year-earlier period.
ITC began selling ready-to-eat foods under its Kitchens of India brand in 2001, and added confectionery, staples and snack foods two years later.
The hotels business reported profit before tax fell 51 percent to 406.3 million rupees, while the paper division posted a decline of 4 percent to 1.88 billion rupees.