BAT half-year profit rises to Ksh.2.7 billion

BAT half-year profit rises to Ksh.2.7 billion

British American Tobacco (BAT) Kenya has posted an eight per cent growth in profit in six months to Ksh.2.7 billion.

The half year growth in earnings from Ksh.2.5billion an year earlier is largely attributable to lower costs of operations and financing costs in the period.

The company’s costs of operations fell by 10.1 per cent to Ksh.6.8 billion as finance costs declined to Ksh.81 million in the period from Ksh.126 million last year.

BAT net revenues were however down 7.1 per cent in the six months period ending June 30 at Ksh.10.5 billion from Ksh.11.3 billion from lower sales.

“This was driven by lower domestic and export revenue reflecting the adverse economic impact of the COVID-19 pandemic and the impact of exercise-led price increases at the beginning of the year,” BAT said in a statement on Wednesday.

BAT however incurred a lesser tax charge attributed in part to shrinking revenues and April’s VAT adjustment which brought the effective rate down to 14 per cent from 16 per cent.

The company’s excise duty/VAT bill came down to Ksh.6.1 billion from Ksh.7.9 billion while the income tax expense declined by 8.6 per cent to Ksh.987 million.

BAT’s board has declared a Ksh.3.50 interim dividend to be paid out on September 18 to shareholders on its register at the close of August 21.

The dividend declaration is in spite of BAT failing to generate any new cash balances in the period a factor it attributed to an inverse timing in working capital movements.

The company recorded a Ksh.1.9 billion decline in cash and cash equivalents in the six months.



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