Pakistan Tobacco Company Limited (PTC) has reported a strong financial performance for the six months ended June 30, 2026, with significant growth in revenue, profitability and cigarette volumes. The company said disciplined execution of its strategic priorities, improved operational efficiency and stronger commercial performance helped support the results despite inflationary pressures and a challenging business environment.
According to the financial statements, PTC recorded gross turnover of Rs221.79 billion during the first half of 2026, compared with Rs184.09 billion in the corresponding period of 2025. After excise duty and sales tax, net turnover rose to Rs83.07 billion from Rs69.39 billion, representing growth of around 20%.
Profitability improves significantly
The company’s bottom line also strengthened considerably. Gross profit increased 25% to Rs40.91 billion, compared with Rs32.84 billion a year earlier. Operating profit climbed to Rs30.33 billion from Rs24.14 billion, while profit before tax reached Rs30.48 billion.
Profit after tax stood at Rs18.53 billion, up from Rs14.26 billion in the first half of 2025, representing an increase of approximately 30%. Earnings per share consequently improved to Rs72.52 from Rs55.81.
The company attributed the improvement partly to effective margin management and cost-control initiatives. Cost of sales increased by 15%, below the rate of volumetric sales growth, reflecting productivity and efficiency measures undertaken during the period.
Cigarette volumes rise amid crackdown on illicit trade
PTC reported a 24% increase in domestic cigarette volumes during the period. The company said stronger government enforcement against illicit cigarette products helped shift consumer demand toward legitimate, duty-paid brands.
The illicit cigarette market nevertheless remains a major challenge for the industry. PTC said the widespread availability of non-duty-paid products continues to affect compliant businesses and government revenues, with annual losses to the national exchequer estimated by the company at more than Rs250 billion.
VELO expands its consumer base
Beyond its traditional cigarette business, PTC continued to develop its modern oral portfolio as part of its broader multi-category strategy.
The company’s VELO modern oral brand added 40,000 consumers, taking its total consumer base to approximately 0.6 million. VELO accounted for 5.1% of PTC’s net turnover during the period, with turnover from the brand growing 31% year-on-year.
PTC said it remains aligned with BAT Group’s vision of building a “Smokeless World” and intends to continue investing in its modern oral portfolio during the remainder of 2026.
Strong cash generation and shareholder returns
The company’s cash position also improved during the first half. Net cash generated from operating activities reached Rs22.06 billion, compared with Rs18.26 billion in the same period last year. After investing and financing activities, cash and cash equivalents stood at approximately Rs9.94 billion at June 30, 2026.
The strong earnings performance also translated into higher shareholder distributions. PTC declared a third interim cash dividend of Rs35 per share, taking the aggregate dividend announced for the period to Rs105 per share.
Outlook remains focused on growth and efficiency
Looking ahead, PTC said it enters the second half of 2026 with positive momentum across its portfolio. However, the company continues to face external uncertainties, market volatility and the persistent challenge posed by illicit cigarette products.
Management said it will maintain its focus on innovation, risk management, cost optimisation and operational effectiveness while seeking opportunities for sustainable growth.
The company also saw a leadership transition during the second quarter. Syed Ali Akbar stepped down as CEO to take up a BAT area role, while Usman Zahur became Managing Director and CEO, returning to Pakistan after senior assignments in Hong Kong and Germany.
Overall, PTC’s first-half results point to stronger sales, improved margins, rising profitability and increased shareholder payouts. With domestic cigarette volumes benefiting from stronger enforcement against illicit trade and VELO continuing to expand, the company appears positioned to build on its first-half momentum through the remainder of 2026.
