Nyashadzashe Ndoro
British American Tobacco Zimbabwe defied a tough economic climate in 2023 to achieve a significant rise in profits, despite a decline in sales volume.
“The trading environment for the year ended 31 December 2023 was characterised by hikes in retail prices for basic commodities triggered by rising inflation resulting in pressure on consumer purchasing power,” said Chairman Lovemore Manatsa in a statement.
Despite these challenges, BAT reported a 147% increase in revenue to ZW$288 billion (US$1.8 billion) for the year. This growth, according to Manatsa, was driven by “continuous price reviews in line with the currency devaluation together with revenue generated from cut-rag tobacco and leaf exports”.
Profit after tax also surged by 131% to ZW$55.4 billion (US$34.6 million) for the year. Earnings per share jumped to ZW$2 684.85 from ZW$1 163.51 in the prior year.
The sales volume, however, painted a different picture. The company's total volume for the period under review declined by 5% from 1.054 billion sticks reported in the previous year to 1.003 billion sticks. Manatsa attributed this to the “challenging operating environment”” which also led to an "increased credit defaulting rate from the customers”.
BAT Zimbabwe also noted a 32% decline in export volumes of cut rag tobacco to 282,940 kgs during the period under review compared to the prior year.
Looking ahead, the company remains cautious about the future. “Although trading conditions are expected to remain challenging in 2024, the Board is confident that the Group and Company are on a sound footing to navigate through the oscillating economic environment,” said Manatsa.
The company highlighted its “effective Business Strategies, the equity of our brands and the quality of our people” as reasons for its confidence.
Manatsa expressed appreciation to the company’s board, staff, and stakeholders for their support throughout the year.
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