NAIROBI, Kenya, Feb 27 – British American Tobacco (BAT) earned Sh3.1 billion in 2011 compared to Sh1.8 billion in 2010, while reducing net finance costs.
Area Director Gary Fagan said total domestic and export volumes grew by 14 percent due to higher contract manufacture volumes and good performance in Kenya’s domestic markets.
“All the markets that BAT Kenya supplies have grown during the course of 2011,” he said.
“We see this trend continuing in 2012 and we’ve invested for future growth and at this stage it’s paying off considerably,” he added.
BAT contributed Sh10.5 billion to the government’s revenue in 2011, as operating profits rose 59 percent generating Sh5.4 billion, a 72 percent increase from 2010.
“Kenya continues to grow and that’s great because we will continue delivering on the bottom line and we will continue to focus on both sectors of the market,” he confirmed.
Fagan said that since 2009, the company has seen the majority of its profits steadily shift from imports to exports as last year saw 57 percent of the cigarettes it manufactured being exported, while only 43 percent were sold domestically.
BAT’s total revenues rose Sh20.14 billion in 2011 from Sh13.54 billion in 2010, while earnings per share jumped to Sh30.98 from Sh17.67.
He said that the Nairobi factory, which employs about 1,000 people and manufactures cigarettes for the domestic Kenyan market, as well as for export to 16 countries in sub-Saharan Africa, continues to play a key role in their company’s success and they plan to invest Sh1.2 billion in 2012.
The cigarette manufacture revealed that it will pay a final dividend of Sh27 bringing the total dividend for the year to Sh30.50 compared with Sh17.50 in the previous year.
Finance Director Philip Lopokoiyot said that the company is concerned about heightened political risks, lingering impact of high inflation, the changing regulatory landscape and port congestion in 2012.
“The port congestion has affected us considerably in January holding up a lot of our exports in the region and costing us about Sh70 million thus far,” he admitted.
He said they intend to offset the challenges by growing their market share, expanding capacity, and improving productivity and operating margins.