West Indian Tobacco Co Ltd (Witco) is reporting a 0.7 per cent increase in after-tax profit of $92 million for the three-month period ending March 31. Its profit before tax was $129.2 million and gross profit was $149.2 million.
It also enjoyed an increase in revenue of $202.2 million.
Witco chairman Ingrid Lashley attributed the improvements to higher volumes and sales stemming from the reopening of the economy, especially the entertainment sector, in her review of the unaudited interim results.
"Revenue increased by $2.4 million or 1.2 per cent over the same period last year driven mainly by increased volumes and a sales mix improvement given that the entertainment channels were reopened with the gradual removal of covid19 restrictions," she reports.
As most manufacturers have said, Lashley said the cost of sales was higher, noting increased raw material costs.
"There has also been a significant increase in the cost of sales owing to a combination of factors including higher royalties and increased costs of direct raw materials."
Key to sustaining profitability has been investment in its brands, she said.
"The company recognises that investment in its brands is critical to ensure that the portfolio remains relevant and dynamic as we operate in a challenging economic environment. We continue to be responsive in the ongoing process of portfolio transformation initiatives focused on meeting consumer needs. To this end we will continue to leverage our robust route-to-market process to ensure that our products are available to all our customers on time and in full."
Despite the results, an interim dividend will not be paid to shareholders given, Lashley said, "the current ongoing and global environment and the volatility of associated economic factors..."
In March, Witco announced a $379 million profit for 2021, a $30 million decline compared to the previous year, but was optimistic of a rebound in sales and market share. Also that month, the company recommissioned its upgraded factory in Champs Fleurs. In January, it revealed its new cigarette packages with updated health warning labels.