BAT Kenya has reported a 22% increase in revenue in the six months that ended on 30th June 2021 to KSh20.245 billion compared to KSh16.615 billion posted in the same period last year. Strong domestic sales, and increased investments in the brand are some of the factors that boosted BAT’s revenue.
The biggest cigarette manufacturer in East Africa posted KSh2.698 billion in half-year net profit, up from KSh2.679 billion in 2020. Even with the rise in net profit, BAT said that the business continues to hurt from the covid restrictions introduced in 2020, although they were partially lifted earlier this year. Additionally, the company said that illicit cigarette trade negatively impacted its revenue.
BAT estimates that unlawful cigarette sales cost the government KSh4 billion in tax revenue annually. The manufacturer is one of the biggest tax payers in the country. In the half-year period that ended in June, BAT paid a total of KSh9.2 billion in duties, value-added tax, corporate tax, and PAYE, equivalent to 45% of its total revenue.
BAT’s cost of operation surged by 27% to KSh8.6 billion mainly driven by increased sales volumes, investments in the brand, and the impact of covid19 on the company.
The company managed to generate KSh3.6 billion cash from operations up from KSh465 million in the same period a year ago.
In the near future, BAT aims to reduce the harmful effects cigarette sales have on their consumers by “offering alternative innovative products, including tobacco-free nicotine pouches.” The company has invested KSh2.5 billion in new factory in Nairobi to produce tobacco-free nicotine pouches as part of its contribution to the Big 4 Agenda.
BAT has declared an interim dividend of KSh3.50 per ordinary share to be paid on 16th September 2021.