British American Tobacco (M) Bhd managing director Nedal Salem.
PETALING JAYA: British American Tobacco (M) Bhd
(BAT Malaysia) remains optimistic of its financial performance in 2025, backed by its resilient combustible product business and multicategory portfolio.
That said, the group considered 2025 to be a crucial year as the Control of Smoking Products for Public Health Act 2024 (Act 852) and its regulations would take effect in phases over the course of the year, although it reiterated that it is fully prepared to navigate these changes effectively.
Announcing its results for the fourth quarter (4Q24) and full year of 2024 yesterday, the group said its net profit inched up 3.4% year-on-year (y-o-y) to RM49mil, as revenue improved fractionally to RM653mil.
For the full year, turnover was stable at RM2.3bil, although earnings was lower by 6% y-o-y to RM183.1mil.
Commenting on its 2024 performance, BAT Malaysia reported that the legal combustible industry experienced a 2% decline in volume for the year as compared to 2023, despite the lower incidence of tobacco black market by 0.6%, from 55.6% to 55% last year.
“Combustible products continued to face challenges as consumer preference shifted to reduced-risk alternative products,” it remarked.
The group attributed its growth in yearly revenue primarily to its product portfolio strategy.
It said the marginal decline in profits was mainly due to lower margins associated with vapour products and the downtrading trend within the combustible industry.Of note, BAT Malaysia had declared a dividend of 15 sen per share for 4Q24, amounting to RM42.8mil, bringing its total dividends for 2024 to 59 sen per share.
Managing director Nedal Salem commented that its financial performance was within expectations as the combustible business remains resilient despite the changing market trends.
“We are optimistic of the company’s prospects for 2025 backed by Dunhill, the No. 1 brand in Malaysia, with 60 years presence as the top cigarette brand in the country,” he said.
Looking ahead, he said BAT Malaysia would focus on growing Dunhill in the premium segment, along with other brands within its portfolio in the aspirational premium and value-for-money segments.
“This is in tandem with our strategic aim to deliver combustible value growth as part of our multicategory business,” said Salem, adding that BAT Malaysia is also encouraged by the intensified enforcement actions from the Royal Malaysian Customs Department in addressing the tobacco black market.
He pointed out that the initiative had helped to reduce the incidence of tobacco black market in the country.
“While the incidence of tobacco black market has been on a declining trend, we encourage the government to continue to focus its attention and resources to address the issue in 2025,” he said.
