PETALING JAYA: British American Tobacco (M) Bhd posted a lower net profit of RM184.14mil for the second quarter ended June 30, from RM185.84mil in the same period last year, impacted by lower volumes and loss of 14s pack size margin.
Its revenue for the period rose to RM1bil compared with RM993.87mil previously, while earnings per share dipped to 64.50 sen from 65.10 sen.
For the six-month period, its net profit fell 4% year-on-year to RM362.69mil from RM377.74mil a year ago on the back of revenue of RM2.035bil. The company declared a second interim dividend of 60 sen per share and a special dividend of 30 sen per share. The dividends are tax exempt under the single-tier tax system in respect of the financial year ending Dec 31.
BAT Malaysia managing director William Toh said the decline of legal cigarettes was to be expected given the high illicit cigarette trade in the country and another steep hike in excise this year would exacerbate the problem of illicit cigarettes trade.
The illicit cigarettes market has drastically increased from 14.4% in 2004 to 36.3% in 2010 as a result of high excise increases, which has incurred an estimated RM2bil in tax revenue losses for the Government.
The group’s profit outlook for 2011 remains cautious although improved in comparison with the outlook in the first quarter, he said, adding that a key determinant on the year’s performance would be the magnitude of the next excise increase.