BAT Kenya has recorded an increase in gross revenue by 22 % to Kes 20.25 billion during the half-year period ended 30th June 2021. The firm attributed the performance to a recovery in domestic sales volumes, excise duty-led price increases and sustained momentum in exports.
The Cigarette maker’s recorded an increase in half-year net profit by Kes19 million to Kes 2.69 billion as sales volumes grew in the COVID-19 environment. However, despite the rise, the company said business continues to feel the effects of the COVID-19 restrictions introduced in 2020, although they were partially lifted earlier this year. Additionally, the company said that the illicit cigarette trade negatively impacted its revenue.
In the half-year period that ended 30th June 2021, the company paid Kes 9.2 billion in duties, value-added tax, corporate tax, and PAYE, equivalent to 45% of its total revenue, making the company among the biggest taxpayers in the country. BAT attributed the high cigarette sales cost to the government Kes 4 billion in tax revenue annually.
Cost of operation surged by 27% to Kes 8.6 billion in the half-year period. The increase was mainly driven by increased sales volumes, investments in the brand, and the impact of COVID-19 on the company.
However, the company managed to generate Kes 3.6 billion cash from operations up from Kes 465 million generated in the same period in 2019.
“Despite the challenging operating environment, increased investment behind our brands and support to our trade partners has seen the recovery of domestic volumes. This coupled with easing Covid-19 restrictions resulted in a strong financial performance,” BAT in their results.
BAT Kenya Dividend & Outlook
BAT Kenya aims to reduce the harmful effects cigarette sales have on their consumers by offering alternative innovative products, including tobacco-free nicotine pouches.
The company has invested Kes 2.5 billion in the new factory in Nairobi to produce tobacco-free nicotine pouches as part of its contribution to the Big 4 Agenda.
BAT Kenya Plc has declared an interim dividend of Kes 3.50 per ordinary share to be paid on 16th September 2021.