KUALA LUMPUR: British American Tobacco (M) Bhd
(BAT Malaysia) said it registered a higher bottomline in the third quarter of the year as its operating expenses were significantly reduced from the previous year.
In a statement, the tobacco and nicotine products manufacturer said it had reduced operating expenses by 28.9% during the quarter ended Sept 30, 2024, as compared to the year-ago quarter when the group had made a substantial investment in the launch of the Vuse e-cigarette brand in Malaysia.
It said its profit from operations grew 17.1% to RM99.5mil as compared to the same quarter last year, despite a dip in gross profit margin by 1.3% due to the lower margin of vapour products.
For the quarter under review, BAT Malaysia's net profit was RM67.91mil, higher than RM59.54mil in the year-ago quarter, which translates to an earnings per share of 23.8 sen compared to 20.9 sen previously.
The group said revenue was slightly higher at RM609.95mil compared to RM606.8mil, due to an improved product mix and increased sales from vapour products, partially offset by higher investment.
For the nine-months period, however, BAT Malaysia's net profit slipped to RM134.18mil from RM147.38mil in the year-ago period, while revenue was lower at RM1.66bil compared to RM1.68bil previously.
The group declared a third interim dividend of 22 sen per share, going ex on Nov 15, 2024, and payable on Nov 27, 2024.
BAT Malaysia managing director Nedal Salem said the financial performance in 3QFY24 was encouraging, especially with the progress made by Vuse in steering the group's growth in Malaysia.
"Our investments to-date are showing promising results as it has led to the group having a better product mix and increase in volume.
"The group remains optimistic that its performance will continue to strengthen, backed by its multi-category portfolio as the group aims to continue growing Vuse," he said.
On the government's Budget 2025 announcement of additional allocations to enforcement authorities to address smuggling activities, he said the tobacco black market has been on a decline since 2020 but remains high at 54.4% in July 2024.
"Apart from the proactive work done on the enforcement front to curb the supply, the government should also develop solutions that would address the issues to curb demand of black-market products," he said.
