TANZANIA Cigarette Company (TCC) pre-tax profit has gone down by 30.8 per cent after being affected by coronavirus pandemic health restrictions and precautionary behaviours by firms and consumers.
According to TCC financial statement, profit before tax declined from 78.2bn/ - in 2019 to 54.1bn/- last year, citing mainly impacted by general consumers spending behaviours, sales mix and volume.
However, the TCC Board recommended a final gross dividend of 300/- per share for last year compared to 250/- in 2019.
TCC Chairman, Paul Makanza said the profit was eaten by the distribution challenges of domestic market and lockdown in DRC in the last year second quarter which is a key market of the Dar es Salaam Stock Exchange (DSE) listed firm.
“We remain optimistic about the future,” said Mr Makanza yesterday in a statement, adding that a return to pre-pandemic growth rates will depend on sound domestic polices to accelerate the recovery of economic activities.
“We are very encouraged by the level of publicprivate dialogue (PPD) to discuss some of these policy measures through formal PPD platforms,” said Mr Makanza.
Despite the challenges, the firm business fundamental remained strong since its profitability ratios remained sound, reflecting healthy and profitable business, the chair said.
The report showed that current assets were 2.23 last year compared to 2.55 times, greater than current liabilities, reflecting the company’s ability to meet its short-term obligations with ease.
Total assets were 2.78 last year compared to 3.30 times greater than total liabilities, indicating that the company remains highly solvent.
“The future will depend on sound domestic policies to accelerate recovery,” Mr Makanza said. The chair of the largest cigarette maker in the country also said through the government’s timely measure, combined with limited mobility restrictions, fiscal and monetary measures to inject liquidity into the economy and sustain economic activities, “Tanzania avoided recession”.
The emergence of the Covid-19 in early 2020 disrupted supply and demand chains and plunged the global economy into 4.3 per cent recession in 2020.
However, the pandemic induced global economic shock slowed Tanzania’s economic growth to 5.5 per cent in 2020 compared to 7 per cent in 2019.