BAT records 50 pc revenue growth

Business Writer

Cigarette maker, BAT Zimbabwe, recorded revenue growth of 50 percent to $24,3 billion for the year to December 31, 2022, compared to the previous year, although volumes slumped.

Chairman, Lovemore Manatsa, said the growth in revenue was driven by price reviews and revenue generated from cut-rag tobacco and leaf export sales.

These two income streams generated a gross profit of $18,3billion which represents a 74 percent growth when compared to the year prior.

Profit before tax for the year was finalised at $9 billion which reflects a 20 percent growth compared to the same period in the prior year.

“However, the revenue growth did not translate into similar growth in profit before tax due to the impact of exchange losses,” said Manatsa.

In terms of volumes performance, the group recorded 1 054 million sticks for the year under review, compared to 1 130 million sticks the previous year ending (ending 2021), resulting in negative volume performance for the period.

The business was also subjected to the obtaining erratic power supplies coupled with other economic challenges such as inflationary pressures resulting in waning disposable incomes.

Manatsa said: “However, despite increased power shortages and reduced disposable income, the group was able to deliver a strong performance that was only 6,7 percent short of the previous year.

“This volume drop was driven by shortage of RTGS in the market which made it difficult for customers to purchase our products. Further, the group established that the smart pricing mechanism implemented by the company resulted in higher pricing when compared to competitor trade prices in United States Dollars (USD).”

Separately, export volumes of cut-rag tobacco declined by 43 percent during the period under review compared to prior year as a result of decreased export market demand.

Although trading conditions are expected to remain challenging in 2023 characterised by high levels of inflation, exchange rate volatility and the global impacts of the Russian invasion of Ukraine, BAT is confident that the group is in a good position to navigate these erratic economic conditions through the implementation of effective business strategies, the equity of our brands and the quality of our people.

“The group will continue to deliver growth and value for its shareholders,” said Manatsa.