This archive report was first published on 16 July 2020.
On July 16, 2020, British American Tobacco (BAT) announced a net profit of Sh2.7 billion for the half financial year ended June 30, 2020, a rise from Sh2.5 billion recorded in a similar period.
According to Kathryne Maundu, BAT company secretary, the firm demonstrated resilience amidst the disruption of the COVID-19 pandemic, which worsened an already challenging external environment.
However, the cigarette maker saw its unaudited financial results of its gross revenue drop by 13.6 percent to hit Sh16.6 billion from Sh19.2 billion it had registered in June 2019.
Maundu attributed the decline to lower domestic and export revenue, reflecting the adverse economic impact of the COVID-19 pandemic and the impact of excise-led price increases at the beginning of the year on consumer affordability and illicit trade incidence in Kenya.
On the cost side, BAT spent Sh6.8 billion due to lower sales volumes, productivity, savings initiatives, and prudent cost management.
Tax to the government on the other hand in the six months to June dropped by Sh1.9 billion to hit Sh7.4 billion in line with lower domestic volumes and changes in tax rates effected by the government to mitigate adverse effects of the COVID-19 pandemic.
Illicit trade continues to impact industry revenue and deny government in excess of an estimated Sh2.5 billion per annum in revenue, according to the firm's statement.
Despite the challenges, BAT has retained its interim dividend at Sh3.50 per share.
