BAT reports 18pc growth in half-year profit to Sh2.7b
EARNINGS: British American Tobacco Kenya Plc (BAT) grew its profit to Sh2.7 billion in the six months to June 30, a 1.8 per cent increment over the same period last year.
The tobacco manufacturer announced that its profits rose from Sh2.5 billion, despite an economic environment hammered by the coronavirus pandemic.
According to the statement, the firm recorded lower operational and financial costs, with the cost of operation falling by 10.1 per cent to Sh6.8 billion in the period under review, from Sh 7.6 billion.
Financial cost declined to Sh81 million from Sh126 million in 2019, reflecting what the board of directors said was the impact of lower sales volumes, productivity savings initiatives and prudent cost management measures.
The unaudited results show that company recorded lower sales revenue of Sh10.5 billion from Sh11.3 billion due to reduced domestic and export demand, attributed to the adverse impact of Covid-19 pandemic and a rise in excise price increases leading to a 13.6 per cent reduction in gross revenue to Sh16.6 billion.
Revenue decreases
During the period under review, the results show, net revenue decreased by 6.7 per cent to Sh10.5 billion, mirroring the impact of a decline in gross revenue.
This was partly offset by a decrease in Excise Duty and Value Added Tax (VAT) due to decline in domestic sales volumes and the change in VAT rate in April 2020.
The company’s profit before tax increased by 1.5 per cent to Sh3.7 billion, reflecting the impact of the higher operating profit and lower finance costs.
According to BAT, the reduction in cash generated from operations was driven by timing of working capital movements in the period under review.
