BAT net profit climbs in 2Q, declares 25 sen dividend

KUALA LUMPUR: British American Tobacco (M) Bhd (BAT), which saw its net profit climb to RM73.25mil in the second quarter ended June 30, has declared a second interim dividend of 25.0 sen per share.

The dividend amounted to RM71mil and will be paid on Aug 18.

Its revenue for the period rose 7% to RM637.46mil against RM595.8mil a year ago while earnings per share (EPS) climbed to 25.70 sen per share from 25.10 sen previously.

For the first half to June 30, BAT recorded revenue of RM1.16bil which is flat against the same period last year. Its profit from operations stood at RM191mil compared with RM193mil in the same period last year.

In a statement, BAT said the group’s volume for the first half of 2022 remained consistent with the first half of 2021 due to the dip in demand during the onset of the Omicron variant in 1Q22 offset by gradual consumption recovery during the endemic phase in 2Q22.

The tobacco group said Dunhill’s share of the premium segment grew by 0.9 percentage points (ppt) to 62%, further strengthening its market leadership position.

Its value-for-money (VFM) brands also grew by 0.7ppt to 34.9% share of segment as compared to the same period last year.

BAT’s share of the aspirational premium segment has contracted by 3.3ppt to 41.2% as a result of the portfolio optimisation strategy in delisting Pall Mall during the first half of 2022.

Managing director Nedal Salem said BAT had maintained a steady performance for the first half of this year, a clear indication that it is on the right path to enhance its prospects and maximise returns to shareholders.

“For the second half of the year, we will continue our focus towards building ‘A Better Tomorrow’, with an emphasis on reducing the health impact of our business.

“We are encouraged by the Government’s commitment to regulate the vape industry in Malaysia. We strongly urge the Government to adopt policies that are evidence-based and data-driven, to ensure the over one million Malaysian vape users have access to reduced-risk products that are compliant with quality and safety standards.

“BAT will strongly support any sensible, pragmatic regulations on vaping, in tandem with our purpose to build A Better Tomorrow™,” he said.

Nedal added that the Government must also continue its push toward curbing the tobacco black market in Malaysia.

“The illegal cigarette trade currently commands around 60% of the total market in Malaysia. Over the last five years, the government has already lost some RM25bil in tax leakages to the illegal cigarette market. Smugglers are now being more creative in smuggling via small coastal jetties.

“BAT urges the Government to take effective enforcement actions to shut these channels down, whilst also addressing the affordability pressures faced by consumers,” he said.

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