PETALING JAYA: The tobacco black market remains the single biggest drag on the legal industry, with more than half of all cigarettes consumed in Malaysia continuing to evade tax, said British American Tobacco
(Malaysia) Bhd (BAT Malaysia).
The group said illicit cigarettes accounted for 56% of total industry volume as of July 2026, marginally lower than 56.2% in May but above the 54% recorded at end-2025.
Managing director Daniel Hsu said in a statement: “We welcome the Government’s robust enforcement allocation under Budget 2027. We will continue to engage constructively with the relevant authorities and other stakeholders in efforts to address illicit trade.”
BAT Malaysia recorded a net profit of RM2.3mil for the third quarter ended Sept 30, 2026 (3Q26), on revenue of RM302mil, marginally higher than RM300.8mil a year earlier.
Operating expenses declined 40% quarter-on-quarter to RM46.4mil as costs associated with its Route-to-Market (RTM) transformation eased.
For the nine-month period, revenue fell to RM977.6mil from RM1.2bil, while the group narrowed its net loss to RM22.2mil from RM24.5mil in the first half.
“Our third-quarter financial performance shows that the decisive actions we took earlier this year are beginning to take hold. Having absorbed the bulk of our one-off transformation costs in the first half, we have now delivered two consecutive profitable quarters and are progressively improving our performance, despite the decline in market share. We are not yet where we want to be, but the direction is clear,” he said.
The group said the legal cigarette market contracted 3.9%, while its sales volume declined 21.1%, accompanied by a 1.9 percentage-point reduction in market share.
On its RTM transformation, Hsu said: “Our new Route-to-Market model has gone live, and early operational benefits are beginning to emerge, seeing higher sales-call productivity and increase in face-to-face engagement with our retailers.
“Our focus now is to make the model work harder for us by sharpening execution in the trade, improving distribution efficiency, reducing out-of-stock occurrences and leveraging our simplified cost base to support a more sustainable business,” he added.
BAT Malaysia declared a third interim dividend of two sen per share, totalling RM5.7mil, payable on Dec 28, 2026.
