Cigarette maker BAT Kenya has announced a final dividend of Sh60 per share after its net profit rose 17 percent to Sh5.25 billion in the year ended December 2025 on lower operating costs.
The final dividend, when added to the earlier distributed interim payout of Sh10 per share, brings the company’s full distribution for the year to Sh70 per share, amounting to Sh7 billion.
The final dividend will be paid on June 12 to shareholders on the company’s register at the close of business on May 8, 2026. The full year payout represents a 40 percent increase from Sh50 per share in 2024, which amounted to Sh5 billion.
BAT’s gross sales, including indirect taxes, fell 12.5 percent to Sh35.95 billion, attributed by the company to growing incidence of illicit cigarettes in the domestic market.
Earnings were however supported by stable export sales, which represent approximately half of the company’s revenue, and the resumption of sale of oral nicotine pouches in the second half of the year.
BAT in 2019 introduced the pouches, then branded Lyft, as it sought to diversify away from combustible cigarettes. It however stopped selling them a year later after the government said they ought to be regulated as a tobacco product.
The company in 2024 sold the pouch-making machinery at its Nairobi factory after lying idle for five years due to the marketing ban, saying that it would rely on imports once it got the nod to bring the pouches back to the market.
The company’s operating costs declined by 15.7 percent to Sh15.72 billion, attributed to reflecting lower sales volumes, cost management and productivity initiatives implemented during the period.
BAT Kenya Managing Director Crispin Achola said profitability was also positively impacted by currency stability, which resulted in finance income of Sh0.2 billion compared to an exchange loss of Sh0.8 billion in 2024.
“In Kenya, the domestic market continues to be adversely impacted by illicit trade. Illicit cigarette prevalence now represents 45 percent of the domestic market, a drastic increase from 37 percent in 2024,” said Mr Achola, citing unnamed third party research.
“In line with our commitment to delivering sustainable shareholder value, the board of directors has proposed a final dividend in respect of the year ended December 31, 2025 of Sh60 per share, to be recommended for approval by shareholders at the Annual General Meeting to be held on June 12, 2026.”
BAT’s full year dividend of Sh7 billion for the full year will surpass its net profit of Sh5.25 billion, pointing to distribution of expected future cash flows, and a partial raid on retained earnings.
The company closed the year with retained earnings of Sh11.86 billion, down from Sh12.07 billion in 2024. Its cash and cash equivalents however grew to Sh6.22 billion at the end of December, from Sh5.39 billion at the beginning of the year.
In 2024, BAT also distributed a larger amount than its net earnings, which stood at Sh4.48 billion.
BAT is one of the top dividend payers at the Nairobi Securities Exchange (NSE), having stood out for handing shareholders 100 percent of net profits in dividends in the past.
Such payout ratios are seen on mature companies that do not need to make large capital investments annually to drive growth. The company’s full year dividend of Sh70 per share gives it a yield of 13 percent, when calculated against Thursday's closing share price of Sh538.
Dividend yields at the NSE have generally shrunk in the ongoing bull run, with only five out of the 30 dividend paying firms currently carrying trailing yield above 10 percent.
