Tanzania Cigarette Company (TCC) experienced a slight lower net profit which they attributed to the fluctuation the shilling was facing leading to an increase in the cost of imported raw materials.
TCC, one the highest tax paying companies in the country has recently released its financial statement showing a 4.2 per cent fall in net profit. The company had made 65.7bn/-net, which is lower compared to 68.6bn/-net profit made in 2014.
It blames the decline in net profit on negative impacts of foreign exchange rate on imported raw materials, one-off costs related to restructuring and amicable settlement of a legal case.
The fall in net profit is blamed on the increase of cost of raw materials which is a result of price fluctuation; one-off costs resulted to restructuring and amicable settlement of a legal case.
According to the financial statement released, the Dar es Salaam Stock Exchange (DSE), listed company made a 179.0bn/- in gross profit last year which is an increase of 4.3 per cent up from 171.5bn/- made in 2014 and had a pre-tax profit of 97.3bn/-slightly down from 98.2bn/-made in 2014.
The cigarette firm is optimistic of future growth in 2016 but cautioned it would be subject to higher rates of income that will boost disposable incomes of the majority, low inflationary environment, a stable shilling and reduction in illicit trade of tobacco products.
Lastly, of also equal importance will be a stable and predictable excise tax regime that promotes domestic value addition of local raw materials and reasonable excise duty hike.