British American Tobacco Uganda (BATU) said Friday that first half net profit fell 2.1 per cent from a year earlier, due to a decline in sales.
Net profit for the period ended June was Shs3.8 billion ($1 million), while sales revenue reduced by 4.1 per cent on year to Shs48.6bn. Net revenue, which deducts excise duties, value added tax, and distributor incentives from gross sales, was down 3.4 per cent.
“During the period, business performance was adversely impacted by macroeconomic volatility, high inflation, and the high prevalence of illicit trade in tax evaded cigarettes, which led to lower sales volume,” the company said in a statement.
The cigarette distributor, however, reported a slight increase in operating profit, which rose 1.4 per cent to Shs5.5bn. This was a result of a decline in operating expenses, down 4.7 per cent to Shs18.7bn, “in line with lower sales volume.”
Income before tax declined by 1.8 per cent from a year earlier to Shs5.4bn. Finance costs for the period were Shs24 million; in 2022, the company reported finance income of Shs149 million. Income tax expense decreased from a year earlier.
Earnings per share fell to Shs77 from Shs79 a year earlier. The company’s net profit margin, however, edged up slightly to 7.8 per cent, up from 7.6 per cent in the same period last year. BATU said it will not pay a dividend for the period.
All but 1.31 per cent of the company is owned by foreign entities. British American Tobacco, the British company, is the majority shareholder with a 90 per cent stake, while Kingsway Fund, a British private equity firm, owns 8.69 per cent of its shares.