BAT half-year net profit up 20.6pc

At a glance

Revenue- Sh9 billion

Operating profit- up 24 per cent

Contribution to government revenues-up by 31 per cent

Interim dividend- Sh3.50 per share

Cigarette maker BAT net profit increased 20.6 per cent to Sh1.41bn in the six months to June and has announced a Sh3.50 per share interim dividend. The firm’s revenues dropped marginally to Sh9.053 billion compared to Sh9.096billion last year but the firm maintained its interim dividend at Sh3.50 a share. Its full year dividend stood at Sh30.50 last year.

“We continue to focus on initiatives in collaboration with key stakeholders aimed at curbing the level of illicit trade in cigarettes. These efforts together with a stable and optimal excise structure will continue to safeguard the sustainability of industry and Government revenues,” said BAT Company Secretary RT Ngobi.

Overall revenue remained stable at Sh9 billion relative to the six months to 30 June 2011. This reflects the impact of higher revenues from domestic and export cigarette business offset by lower shipments of cut rag (semi processed leaf) arising from a lower demand level in the first half of 2012,” reads BAT’s statement in part.

Export cigarettes revenues increased as a result of a 12 per cent growth in volumes offset by the exchange rate impact of a stronger shilling relative to the prior period whilst domestic cigarette revenues grew due to improved mix and pricing.

Its operating profit increased by 24 per cent due to the improved domestic and export revenues coupled with a lower overhead cost base offset by the impact of lower cut rag revenue. Interest expenses were higher reflecting higher interest rates and the timing of borrowings in the first half of 2012.