Chronicle Editor
Oliver Kazunga, Senior Business Reporter
CIGARETTE manufacturer, BAT Zimbabwe, says its contribution to public finances by way of taxes jumped 378,6 percent from $173 million last year to $828 million in the six months period to June 30, 2021.
The listed tobacco manufacturer contributes to Treasury through various taxes, including excise duty, corporate tax, value added tax, customs duties, pay as you earn and withholding tax.
“The group’s contribution to the Zimbabwe Revenue Authority (Zimra) went up from $173 million in 2020 to $828 million for the period ended 30 June 2021,” said the company.
“The key contributors to the increase in the tax payments related to the legislated upward adjustment in excise duty payable year-on-year as well as price increases affected by the group.”
Despite the challenging operating environment, BAT said increased investment behind its brands and focused investment in the company’s route-to-market strategy led to a 27 percent growth in sales volume versus the same period last year.
Revenue grew by $538,3 million (63 percent) from $848,3 million to $1,4 billion, when compared to same period last year.
“The increase in revenue was driven by three factors — increased sales volume, price increases implemented during the current period and the export of cut rag tobacco,” said BAT Zimbabwe.
The above factors resulted in a gross profit growth of $30,8 million (five percent) compared to the same period in 2020. Selling and marketing costs went up by $80,2 million (92 percent) compared to the same period in the prior year, driven by additional marketing investments aimed at driving sales volumes.
Administrative expenses were $109,3 million (168 percent) higher than the same period in the prior year driven by a general increase in costs. Other losses decreased by $264,9 million (88 percent) due to the stability of the Zimbabwean dollar since the introduction of the foreign exchange auction system.
As a result of all the above, operating profit was up by $315,2 million (140 percent) versus the same period last year. Net profit attributable to shareholders for the period under review was $470,3 million compared to a net profit of $152,5 million in the same period in prior year, representing a 209 percent increase.
The group’s earnings per share grew by 209 percent from $7,39 to $22,79 generated in the same period last year.
Cash generated from operations was positive at $556,5 million against a negative $115,4 million in the prior year because of diligent customer collections, an increase in trade payables and a decrease in inventories as of June 30, 2021.
“As a result of the unpredictable operating environment, the board decided not to declare an interim dividend for the period ended 30 June 2021, to allow for reinvestment into the operations of the group,” said BAT.
“We remain committed and confident that our business strategies will deliver value growth for our stakeholders.” — @okazunga
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