BAT sees exponential growth in revenue and profit ...

BAT sees exponential growth in revenue and profit despite challenging environment

Audrey Galawu

Assistant Editor

While tobacco manufacturer, British American Tobacco recorded a negative volume performance in 2023, the group experienced positive movement in revenue and profitability.

BAT sold 1, 003 million sticks, which is 51 000 less than in 2022.

“Nonetheless, the Group and Company recorded a significant increase in profit after tax of 131% compared to prior year and the amount recorded for the year under review was ZWL$55.4 billion and the earnings per share increased to ZWL$2 684.85 from ZWL$1 163.51 in the prior year,” said chairman Lovemore Manatsa.

Total sales decreased by 5% compared to the same period prior year due to a challenging operating environment leading to lower sales and increased debt defaults.

Export volumes of cut rag tobacco reduced to 282,940kgs, representing a decrease of 32% during the period under review.

“Selling and marketing costs increased by 109% compared to same period prior year and administrative expenses also increased by 46% versus last year and the increase in costs was ascertained to the significant devaluation of the currency which led to suppliers revising their prices and charging more for their services and goods,” said Manatsa.

BAT managed to adapt resulting in a 147% increase in revenue and a 101% growth in profit before tax compared to the previous year.

Revenue reached ZWL$288 billion, driven by pricing adjustments in response to currency devaluation and revenue from cut-rag tobacco and leaf sales.

The group introduced e-cigarettes into the Zimbabwean market in the month of October 2023 and sold 34 thousand devices.

Emphasising sustainability, BAT believes in addressing the long-term trend of adult smokers seeking smokeless alternatives through a balanced regulatory and fiscal approaches.

The company aims to facilitate a faster transition to smokeless products with reduced risks.

“Through a multi-category product portfolio, we are well placed to meet this consumer shift through our mission to enable smokers. Switch to Better, while continuing to manage our combustible cigarette business in a responsible manner. While reducing the health impact of our business is a key focus area, we continue to place emphasis on our Environment, Social, and Governance priorities,” BAT managing director, Kenneth Gitonga said.

BAT’s sustainability goals include achieving Net Zero emissions by 2050, Carbon neutral operations by 2030, reducing water withdrawal by 35% by 2025, enhancing livelihoods, increasing women in management roles to 45% and upholding the Standards of Business Conduct.