KARACHI, April 8: On Monday, Lakson Tobacco Company unveiled results for the six months ended on December 31, 2007, posting after-tax profit at Rs471 million. Those marked the first of the figures released by the company, following the devastating events of the end of December last year, when the Lakson Tobacco became one of the targets of looting, arson and riots.

Early last week, the company had notified that the factory had to be closed down as a result of “destruction” and the management planned to lay off all employees. The company announced that it was “in no position to resume all manufacturing operations as that required a significant investment, among others, in installing new plant, machinery, equipment and incurring costs relating to civil works”.

So the wage-earners, already groaning under the burden of burgeoning inflation became the first casualty of the grim events of Dec 27, 28 and 29.

Another unhappy party should be Philip Morris International (PMI) -- one of the largest tobacco companies in the world —which, in January last year had acquired 50.21 per cent shares in Lakson Tobacco Company at $339 million (Rs21 billion), adding to its already held equity interest of 47 per cent in the company.

It has perhaps witnessed much of its investment blow up in smoke even before the year was out. The market price of the share in Lakson Tobacco has plunged from Rs480 on Dec 27 last year to Rs366 on April 8. A greater fall has perhaps been averted for lack of floating stock.

Auditors had inserted a qualification in the Lakson’s accounts released on Monday, stating that the company had filed claims of Rs275 million in respect of damage to property, plant and equipment. Another claim in respect of partially damaged assets was also lodged with the insurance company. Assessment of the level of impairment had still to be finalised.

Lakson Tobacco has been the country’s second largest tobacco company, which rolled out 29.8 million cigarettes in the year ended on June 30, 2006, generating net revenues of Rs10 billion.

Informed sources said that the company employed over 5,000 persons at its factory in Korangi and four others at Kotri, Quadirabad district Sahiwal; village; Mandra tehsil Gujar Khan and 5th at Ismaila, district Swabi. The company also has a leaf division in Mardan, the city reputed as the capital of tobacco-growing areas in Pakistan.

Another 1,500 people earned livelihood from work at the company’s leaf division during the leaf buying and processing seasons. It was not clear whether the company intended to cut jobs at just the Karachi site or other locations as well.

Industrialisation as it is already on the halt, it is painful to watch even the flourishing businesses being burnt down to ashes and labour thrown out of work.

Lakson Tobacco was doing very well until the riots of December. At the close of last financial year, the company held fixed assets of the value of Rs2.5 billion and total assets of Rs6.6 billion. It had stood 13th in the list of top 25 companies at the Karachi Stock Exchange for 2005.

Following the acquisition of almost entire equity stake by Philip Morris in the winter of last year, eight of the 11 seats on the company board were occupied by foreigners. Salman Hameed had stepped in the shoes of Iqbal Ali Lakhani as the chairman & CEO of the company.

The new chief was not available on Tuesday for more information on recent developments and prognosis for the future.