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Kenya

BAT 2017 profit down due to political disruption, smuggled cigarettes

 

NAIROBI, Kenya, Feb 16 – British American Tobacco Kenya has recorded a drop in its profit after tax to Sh3.3 billion for the 2017 financial year, owing to a tough macro environment in the domestic market.

BAT Kenya Managing Director Beverly Spencer – Obatoyinbo says the environment was characterized by rising consumer inflation, a prolonged political disruption and the threat posed by smuggled cigarettes among others.

“Our results were very resilient based on all the circumstances that happened in 2017 and I believe that they present a great foundation for our plans for 2018,” Spencer said.

The company was also dealing with the impact of excise-led price increases on its sales mix.

The company’s net revenue hit Sh18.7 billion, while its earnings per share for the year dropped by -21.2 percent to Sh33.4 percent.

Its contribution to government revenues also dropped by -7.4 percent to Sh18 billion, while cash generated from operations dropped to Sh6.4 billion.

“We remain a key player in Kenya’s economy through our tax contributions standing at Sh18 billion in the form of excise duty, value added tax, Pay as You Earn and corporation tax,” Spencer said.

Going forward, the company’s focus will be on growing its Kenyan market and grow its portfolio and enhance the competitiveness of their factory to deliver sustained value for its shareholders.

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“This year, we are also hoping to get back to our position prior to the excise hike of 2015.”

“The tax environment has been very unpredictable in the last two years. We would like to encourage the government to try and make it predictable as it gives the industry time to plan.”

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