BAT posts 8% decline in sales volumes amid excha...

BAT posts 8% decline in sales volumes amid exchange rate distortions

Nyashadzashe Ndoro

Chief Reporter

British American Tobacco Zimbabwe has reported an 8% decline in sales volumes for the nine months ended September 30, 2024, citing macroeconomic instability and exchange rate distortions as major factors.

"Zimbabwe's operating environment continues to be complex and uncertain, with macroeconomic turbulence fuelled by monetary instability and substantial exchange rate distortions adversely impacting business activity,” the update signed by the company's chairman, Lovemore Manatsa stated.

"Despite these challenges, BAT Zimbabwe is optimistic about the future and continues to review its business model to ensure long-term sustainability and value creation for its stakeholders.”

According to the company's trading update, domestic cigarette revenue decreased by 37% compared to the same period last year, driven by reduced consumer spending and disposable income. However, BAT Zimbabwe managed to reduce operating costs by 33% through cost optimization initiatives.

Despite the challenging operating environment, the company remains optimistic about its future prospects.

"We continue to review our business model to ensure long-term sustainability and value creation for our stakeholders," the company said.

To mitigate the economic challenges, BAT Zimbabwe has implemented dual currency billing, offering flexibility to customers and ensuring business continuity. The company has also reviewed its Route-to-Consumer operations, creating a robust and future-fit model responsive to evolving consumer and market trends.

Looking ahead, BAT Zimbabwe aims to drive growth by simplifying its business model, expanding its consumer-centric brand portfolio, and maintaining strong stakeholder engagements. The company is also committed to its Environmental, Social, and Governance agenda, focusing on reducing its environmental footprint and contributing to local socio-economic development.

"We remain committed to building A Better Tomorrow by reducing the health impact of our business through offering a greater choice of enjoyable and less risky products," the update stated.