August 31, 2010 -
Bulgartabac, Bulgaria's state tobacco company, has registered a 165.93% increase in net profit for the first half of 2010 in comparison with the same period last year. Bulgartabac's financial statements attribute that to considerable increase in exports and optimization of costs. Net profits for the first half of 2010 amount to BGN 7.5 M, with more than five-sixths of the production going for exports.
Exports have increased 56% in volume and about 80% in terms of revenue. Sales for the first half of 2010 total 6736 B cigarettes at BGN 123 M. The company's market share has shrunk to 36% from 50% in 2009 and 90% in 2007. Bulgartabac's financial resources have grown with about 14% for the period.
In 2009 Bulgartabac offloaded itself from two cigarette factories, in Plovdiv and Stara Zagora, and retains two more production facilities, in Blagoevgrad and Sofia.
The company, which holds monopoly to cigarette production in Bulgaria, has long been under a privatization procedure, but this has been marred by controversy and a sale has constantly been failing to transpire. The present government has vowed to finalize Bulgartabac's sale. (Bulgaria - investor shows interest in state-owned cigarette monopoly Bulgartabac..)
Backgrond: Bulgaria's cigarette-maker Bulgartabac registered a net profit of almost BGN 25 M in 2009, the company press service announced Wednesday. This is an increase of 680% compared to 2007, when the company's net profit was only BGN 3,172 M. This staggering increase, however, is primarily due to the sale of two of the company's formerly four plants as part a restructuring strategy aimed at optimizing and concentrating its production. In July 2008, the Bulgartabac plants in the cities of Stara Zagora and Plovdiv were sold for BGN 18 M and BGN 31 M respectively on the Sofia Stock Exchange. Thus, the monopoly remained with only two plants located in Sofia and in Blagoevgrad. In 2008, Bulgartabac sold a total of 17,314 billion cigarettes. Of these, 11,896 billion were sold in Bulgaria, and 5,418 billion were exported. The company's exports have increased by 16,84%.
Bulgaria Cigarette Monopoly with BGN 25 Net Profit in 2008 by Sofia News Agency
Reference: Bulgarian Tobacco Company Registers Huge Profit Increase, Novinite.com (Sofia News Agency). 8/30/2010.
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