BAT 3Q net profit falls 21% to RM56.5mil

KUALA LUMPUR: British American Tobacco (M) Bhd (BAT), which saw its net profit fall 21% to RM59.5mil in the third quarter ended Sept 30 (3Q), aims to grow the market share of its vapour product Vuse and glo, tobacco heating product.

During the quarter, BAT’s revenue dipped to RM606.8mil against RM666.9mil a year ago while earnings per share fell to 20.90 sen from 26.40 sen previously.

The group has declared a third interim ordinary dividend of 19.0 sen per ordinary share amounting to RM54.2mil, payable on Nov 28, 2023 to shareholders.

BAT saw a marginal dip in its overall market share of 0.5%, while volume declined by 9.4%.

During 3Q, BAT undertook a modest price increase in its premium and aspirational premium segments, prompted by rising inflation and increased cost of business.

“This necessary step marks the first time the group has adjusted its prices since 2018,” it said.

For the first nine months, BAT posted a net profit of RM147.4mil, down 26.6% from RM200.8mil a year earlier while revenue dipped 8.2% to RM1.67bil against RM1.82bil previously.

“Our financial results were within expectations given the current economic climate in which increased inflationary pressures have stretched consumers’ disposable income. Nevertheless, we are confident that our purpose to build ‘A Better Tomorrow’ will drive long-term growth, backed by our new category business,” managing director Nedal Salem said in a statement.

“During 3Q, the group launched Vuse Go (1,500 puffs) in limited outlets, and garnered positive results. Following this, we launched Vuse Go (3,000 puffs) in October 2023 with a wider range of flavours. We look forward to expanding Vuse Go to more locations nationwide in the near future,” he added.

The group is also encouraged by the Government’s consistent efforts to tackle the tobacco black market, which remains high.

“We appreciate that the Government acknowledges the severity of the tobacco black market, and continues to implement measures to tackle this issue, which causes Malaysia to lose RM5bil annually in uncollected taxes.

“We believe that the recent measures announced during the tabling of Budget 2024, when implemented effectively, will further play a role in tackling the high levels of the tobacco black market. The group is also supportive of the Government’s decision to maintain the current excise level, to not further fuel the tobacco black market.”