BATU earnings slip after leaf exports axed
KAMPALA, MAY13 – Cigarette maker British American Tobacco Uganda today reported a 26 percent decline in earnings for 2015 on the back of lower leaf export volumes following discontinuation of the leaf business a year earlier.
A battered local unit, inflation that briefly touched double digits and a 29 percent increase excise duty on cigarettes coupled with illicit cigarette smuggling to eat further into the BATU’s earnings.
Profit after tax plunged to Ushs 20.3 billion down from Ush 36.7 billion in 2014. The board has recommended a final dividend of Ushs 413 per share for 2015 subject to withholding tax.
“Despite the difficult economic factors and closure of our leaf operations, the business has registered a strong revenue growth performance and is well placed to deliver sustainable business growth whilst continuing to increase our contribution to government revenues. We managed to reduce our operating costs and grow our cigarette revenues,” BATU Board Chair Elly Karuhanga said.
Cigarette revenues grew 6 percent to Ushs 70 billion in 2015 from Ushs 64 billion the previous year due to price increases on some of BATU’s major brands with Sportsman now generating 50 percent of the company’s revenues.
Dadson Mwaura the BATU Managing Director says for 2016, the company will focus on increasing its market share above the current 40 percent by focusing on the sale and distribution of cigarettes and generating long term sustainability of shareholder returns.
He added that the company would continue engaging law makers to ensure that recent revisions of public health legislation are fair and balanced to deliver the public health objectives while taking into account the legal rights of the industry and the thousands along the value chain who depend on or are employed by the sector.