By ETimes
In their full-year results announcement for the period ending December 2023, British American Tobacco (BAT) reported a 5% decline in total volume, marking a shift from 1,054 million sticks to 1,003 million sticks compared to the previous year.
Mr. Lovemore Manatsa, the group chairman, said, “This decline to the challenging operating environment, citing lower volumes and an increased credit defaulting rate from customers. Export volumes of cut rag tobacco also plummeted by 32% to 282,940 kilograms during the same period.”
Despite the volume setback, BAT made notable strides with the introduction of Vuse ‘New Category’ Products into the Zimbabwean market in October 2023, yielding a total sale of 34 thousand devices. This move reflects the company’s strategic efforts to diversify its product offerings and capture new market segments.
Financially, BAT showcased remarkable resilience amidst the turbulent landscape. The company boasted a total revenue of ZW$288 billion for the fiscal year, marking a staggering 147% increase compared to the previous year.
This substantial growth was primarily fueled by continuous price adjustments aligned with currency devaluation, coupled with revenue generated from cut rag tobacco and leaf exports.
However, this surge in revenue was accompanied by amplified operational costs. Selling and marketing expenditures surged by 109%, while administrative expenses saw a 46% increase compared to the same period in the previous year.
Manatsa elucidated that, “These cost escalations were primarily driven by significant currency devaluation, prompting suppliers to revise their prices upwards. Nonetheless, BAT managed to navigate these challenges adeptly, resulting in a significant uptick in profit after tax, which soared by 131% to ZW$55.4 billion for the year ended December 31, 2023.”
Moreover, the earnings per share witnessed a substantial surge, climbing to ZW$2,684.85 from ZW$1,163.51 in the prior year, underscoring the company’s robust financial performance and commitment to delivering value to its shareholders.
Looking ahead, BAT remains focused on navigating the evolving market dynamics, leveraging its diversified product portfolio and strategic initiatives to drive growth and sustain profitability in an increasingly competitive landscape. As global economic uncertainties persist, BAT’s resilience and adaptability position it well to weather future challenges and capitalize on emerging opportunities in the tobacco industry.