British American Tobacco (BAT) has announced their improved financial results last year indicating a Net revenue growth by 11 percent to Sh. 20,750 Million from Sh.18, 693 million
This result is driven by excise-led pricing in Kenya and exports markets together with higher cut rag sales volumes into Sudan.
According to the BAT, this growth is seemingly yet to have a major impact on Kenya households, who face high food and energy prices as well as increased cost for common goods.
During the 67th annual general meeting, held at a Nairobi hotel, Friday BAT managing director, Beverley Spencer-Obatoyinbo said that the progress that has been made to date and the result delivered in 2018 has set a good pace for the future and stake holders to own more sustainable and profitable business.
Spencer however noted that increase in illicit products in the county stand out as one of the major challenges company is facing.
“In 2017 some 12.4 percent of cigarettes sold in Kenyan market were illicit and by end of 2018 the figure had increased to 14.1 percent,” she said.
Spencer further said that due to the increased illicit products it has cost the government approximately Sh. 2.5billion revenue annually.
“Products meant for export somehow find their way back into the country due to corruption and enhancing tax evasion,” she reiterated.
The MD further said there are 700 million fake stamped tobacco products, notably cigarettes and it is difficult for an ordinary consumer to differentiate between the fake product and original one.
“For this reason we have started an awareness campaign on retail level to educate consumers about the fake products,” she said.
British American Tobacco Kenya chairman, George Maina, said that exports markets performed well despite challenges including electoral, civil and political uncertainty in markets such as Somali, Congo and Sudan.
“In Somali our cigarette exports registered 20 percent revenue growth compared to 2017,”he said.
Maina urged the government and the relevant agencies in charge of control of illicit products to put more efforts in handling the increase of illicit products in the market.
This year, the company has recommended a final dividend of Sh. 31.50 per share and a total dividends per share for 2018 at Sh. 35 per share compared to Sh. 26 per share in 2017
By KNA team
