Bulgaria's largest cigarette maker Bulgartabac has completed 2011 with a net profit of BGN 31.3 M, the company announced Friday based on its annual financial results.

In 2010, Bulgartabac's profit amounted to BGN 5.825 M, with 2011 thus marking a substantial improvement.

At the same time, however, Bulgartabac said the major factor that contributed to its better financial results in 2011 was the income from dividends from the two cigarette plants in Sofia and Blagoevgrad – Sofia BT and Blagoevgrad BT – totaling BGN 32.03 M.

Blagoevgrad BT, which is the largest cigarette plant in Bulgaria, ended 2011 with a lost of BGN 3.87 M, (after a BGN 9.86 M profit in 2010).

Sofia BT saw a profit of BGN 3.55 M in 2011, down from BGN 9.72 M in 2010.

Sofia BT has a 50% smaller production capacity and 47% fewer staff than Blagoevgrad BT, the company notes.

Bulgartabac's factory in Pleven, the Pleven BT tobacco processing plant also registered a loss – of BGN 1 M, compared with a BGN 13 000 loss in 2010.

According to the Bulgarian cigarette maker, the worse financial results of its factories stem from the shrunk consumption in Bulgaria, asset devalutation, and reduced effiency.

"The bad financial results require the conducting of a restrictive policy aimed at the capitalization of the Bulgartabac Group companies," the company said.

In one of the controversial Bulgarian privatization deals, Bulgartabac was sold by the Bulgarian government to a subsidiary of the Russian bank VTB for EUR 100.1 M in September 2011.