BAT Kenya has posted a 19.5% drop in profits after tax to KSh 4.5 billion 2024 from KSh 5.5 billion in 2023.
- •The drop was driven by high operating costs and lower revenues from export sales owing to a stronger shilling.
- •Despite the 19.5% decline in profits, the listed cigarette maker maintained its dividend at KSh 50 per share in 2024 with an improved dividend yield of 13%.
- •The tobacco giant saw its sales increase marginally by 1% to KSh 25.7 billion from KSh 25.6 billion in 2023.
“Our export markets experienced headwinds including forex scarcity, adverse weather, supply chain disruptions and geopolitical tensions, which impacted sales volumes across various markets,” the company said in its financials.
Operating costs increased by 4% to KSh 18.4 billion which the company said was partially offset by benefits from cost saving initiatives implemented during the period.
Finance costs rose sharply by 955%, a loss of KSh 829 million compared to an income of KSh 97 million in 2023 owing to the 20% appreciation of the Kenya shilling against the US Dollar in 2024. The higher finance costs weighed on the profits before tax, coming in 19% lower to KSh 6.5 billion from KSh 8.02 billion in 2023.
“Further, revenues from United States Dollar denominated export sales were adversely impacted, resulting in foreign exchange losses following the appreciation of Kenya shilling against the United States Dollar,” BAT added.
Cash generated from operations increased by 23% to KSh 10.4 billion driven by proceeds from sale of modern oral nicotine machinery.
Following prolonged regulatory challenges, the company sought to dispose of the oral nicotine pouch – commonly known as VELO – factory in Nairobi, which has been dormant for nearly 6 years. The government suspended the oral nicotine pouch sales in the domestic market after a standoff with the cigarette maker over health warnings on the product.
With the interim dividend already paid, the final dividend will be paid on or about 25th June 2025 to shareholders on the register at the close of business on 23rd May 2025.
