BAT Bangladesh sees profit slump as cigarette sales drop 10%
According to its financial report for the January-March quarter, the multinational cigarette manufacturer witnessed a 5% decrease in gross revenue, totalling Tk9,407 crore.
British American Tobacco (BAT) Bangladesh experienced a decline in both sales and profits in the first quarter of 2024, attributed to a notable decrease in its leaf exports and cigarette sales volume within the country.
According to its financial report for the January-March quarter, the multinational cigarette manufacturer witnessed a 5% decrease in gross revenue, totalling Tk9,407 crore.
The government received Tk7,413 crore from supplementary duty and value-added tax (VAT). Its net revenue dropped by 12% to Tk1,994 crore, with profits declining by 9.41% to Tk413 crore compared to the same period in the previous year.
Meanwhile, in terms of volume, its cigarette sales declined by 10.39% and tobacco leaf export fell by 81% to Tk18 crore, which was Tk95 crore in the same period of the previous year.
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The company's earnings per share (EPS) decreased to Tk7.65 at the end of March 2024.
After revealing the Q1 financials on the Dhaka Stock Exchange (DSE) on Tuesday, the share price of BAT Bangladesh declined by 2.57% to close at Tk363.30.
The net operating cash flow per share (NOCFPS) stood at negative Tk10.49, which was negative Tk2.09 in the same period of the previous year.
The NOCFPS decreased from the same period of last year due to higher excise and tax payments, reads the company's financial statement.
According to data released by the Bangladesh Bureau of Statistics (BBS) on 13 May, food inflation soared to a five-month high of 10.22% in April while non-food inflation, on the other hand, stood at 9.64% in March and slightly dipped to 9.34% in April.
As per analysts, inflation may hit the sales of cigarettes as people are now focusing on buying food. As well as the month of Ramadan may have affected its sales for the fasting.
In a disclosure on the stock exchange's website on Tuesday, BAT Bangladesh said its EPS decreased from the same period of last year driven by volume de-growth and lower leaf export.
During the first three months of 2024, BAT Bangladesh sold 1,612 crore sticks of cigarettes in January-March, down from 1,799 crore sticks in the same period of last year.
British American Tobacco Bangladesh has been publicly listed on the Dhaka Stock Exchange (DSE) since 1977.
It manufactures tobacco products and markets brands, Benson & Hedges, John Player Gold Leaf, Capstan, Star, Royals, Derby, Pilot, Hollywood, and Lucky Strike.
It has cigarette factories in Dhaka and Savar, a green leaf threshing plant in Kushtia, and a green leaf re-drying plant in Manikganj.
In 2023, BAT Bangladesh posted an 8.83% growth in its net revenue to Tk9,167 crore and profit slightly increased to Tk1,788 crore, and it earned Tk472.96 crore from leaf export, according to its annual report.
