This archive report was first published on 24 August 2021.
Published on August 24, 2021, British American Tobacco Uganda (Batu) Ltd reported a significant decline in net profits for the six months period to June 30, 2021.
The company's net profit fell by 50 percent to Ush3.4 billion ($965,714) compared to Ush6.8 billion for the same period in 2020.
According to Nicholas Ecimu, the company Secretary, the Covid-19 pandemic continued to adversely impact the business due to restrictions and a general decline in consumer disposable incomes.
The company's revenues were also impacted by the continued presence of illicit cigarettes on the Uganda market, resulting in a significant reduction in tax collections by the Uganda Revenue Authority (URA).
Ecimu noted that the trade in tax-evaded cigarettes estimated at 28 percent continues to negatively impact industry revenues and deny the government Ush38 billion ($10.7 million) in revenue annually.
As a result, gross revenue reduced by 41 percent to Ush45.2 billion, driven by a decline in sales volume, compared to Ush75.9 billion in the same period last year.
However, total cost of operations reduced by 37 percent to Ush16.9 billion, driven by lower sales volume and cost management initiatives undertaken to cushion business profitability.
