Tobacco manufacturer British American Tobacco (BAT) demonstrated resilience amidst the COVID-19 pandemic posting a 42% rise in the profit after tax during the financial year ended 31st December 2020. BAT recorded a profit after tax of Kes 5.5 billion a Kes 1.6 billion rise from the Kes 3.89 billion that was recorded during the same period in 2019.
The company attributed the increase in the profit after tax to the reduction of cost of operations and the governments initiative to reduce the Corporation Tax rate in April 2020.
BAT highlighted the economic constrain that was brought about by the COVID-19 pandemic with illicit trade in tax-evaded cigarettes doubling to an estimated 23% and continues to impact the company’s revenue with the gross revenue for the period reducing by 2% to kes 38.8 billion.
Net revenue increased by 5% to Kes 25.3 billion. The tobacco manufacturer attributed the rise to higher export revenues, lower excise duty and Value Added Tax (VAT). However, domestic sales revenue in the company fell 24 %, resulting in a 2.47% drop in gross revenue to Kes 38.85 billion.
The cost of operations in the company decreased by 3% to kes 17.8 billion mainly due to pro-active cost initiative that was taken by the government to cushion businesses from the impact of the COVID-19 pandemic.
BAT has expressed optimism in the future of the company saying they have invested significantly in the new factory based in Nairobi to manufacture modern oral nicotine purchases.
The Board of Directors proposed the payment of a final dividend of Kes 41.50 per share to be recommended for approval by share holders at the Annual General Meeting.