KUALA LUMPUR: British American Tobacco (M) Bhd
’s (BAT) net profit rose 1.7% to RM913.3mil for the financial year ended Dec 31, 2015, despite a 4.5% contraction in revenue of RM4.58bil.
In a filing with Bursa Malaysia, the Dunhill and Peter Stuyvesant brand owner said both its domestic volumes and contract manufacturing volumes (for export) posted a decline against 2014 figures (-13.5% and -24.8% respectively).
The drop in domestic sales was due mainly to the overall softer demand among consumers due to weaker market sentiments after the goods and services tax (GST) implementation and the impact of the “unusually large” November excise increase, it said.
However, lower operating expenses, higher “other operating income” and lower finance costs led to a 1% increase in pre-tax profit (RM12mil).
BAT noted that operating expenses last year were 8.7% (RM41mil) lower, largely due to the one-off cost related to discontinuation of cigarette rations in 2014 along with year-on-year savings (RM14mil) and further efficiencies in marketing spending and overhead costs.
Other operating income recorded a RM1.7mil increase last year, mainly from the RM1.6mil gains from disposing assets related to the local leaf operation.
Finance costs fell 40.7% (RM6.3mil), driven by the more flexible financial arrangement deployed following repayment of medium-term notes in August 2014.
For the fourth quarter ended Dec 31, BAT’s net profit increased 5.7% to RM196.1mil on the back of a 12.2% lower revenue of RM1.06bil.
BAT shares gained 18 sen to close at RM56.08 on Wednesday.
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