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BAT hurt by high exchange losses posts $5.1bn loss before tax in H1


Oct 2, 2023

By ETimes

HARARE – BAT Zimbabwe, a listed cigarette manufacturer, has recorded an inflation adjusted revenue of $71,56 for the half year ended 30 June 2023.

The figure represents an 111.58% increase from $33.81 billion.

BAT’s topline was driven by optimal cigarette pricing strategies and revenue from cut-rag tobacco exports.

Cigarette sales volumes depreciated by 15% owing to Zim dollar shortages on the local market.

As a result of currency depreciation, the cost of sales rose 89% to $7.4 billion.

Cash generated from operations was up 281% to $36.2 billion underpinned by working capital management initiatives.

Capital spending stood at $966.9 million during the period under review, up from $524.77 in the comparative period.

As expected, due to inflationary cost increases, the group’s administration expenses surged by 112% to $7.5 billion.

On the flip side, BAT made a loss before tax of $5.1 billion.

“Exchange losses increased by 497% to ZW$20.1 billion driven by the revaluation of foreign currency denominated balances due to significant devaluation of the ZW$ during the period under review,” Lovemore Manatsa, the group’s chairman, said in a statement accompanying the results.

“Consequently, loss before tax increased by 773% to ZW$5.1 billion compared to the same period in the prior year, as a result of high exchange losses.”

In historical terms, taxes paid in the form of excise duty, corporate tax, value added tax, customs duties, pay as you earn, and withholding tax were $14 billion.

BAT did not declare a dividend.

In the outlook, Manatsa said they will continue their business growth initiatives.

“Looking ahead, we are confident that our continued investment in the simplification of our business model, our consumer-centric brand portfolio and winning culture, will enable us to deliver sustainable shareholder value, and contribute to the socio-economic growth and development of the country.”

Shares in Tasty fell by a negligible 0.01% to $16299.95 on Wednesday

By ETimes

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