Tobacco firm in US$500 000 loss

for the year ended December 31.
The loss came after expenses eroded the company’s net turnover for the year of US$22,9 million.
At US$22,9 million, turnover had increased by US$15,1 million from the prior year. Cost of goods sold amounting to US$15,8 million resulted in the company registering gross profit of US$6,9 million and an operating profit for the year of US$184 000.
However, financial costs at US$477 000 and income tax charges at US$206 000 pushed the company into a loss position. Sales volumes increased by 12 percent from the prior year.
Gross margin decreased by 8 percent to US$7 million from figures registered in 2009.
This was attributed to an increase in variable costs, driven by an increased cost of leaf tobacco as a result of the transition from local currency to the United States dollar. Commenting on the results, BAT chairman Mr Kennedy Mandevhani said that the company has since last year been investing significantly in enhancing its operational capacities to ensure high growth potential in the outlook period.
“With the introduction of new cigarette making machinery during the year, additional production efficiencies were introduced which will be developed in the coming year.
“To sustain improvements in productivity levels the company is investing in the acquisition of additional production machinery in 2011,” he said.
Notwithstanding noted improvements in some of the country’s economic fundamentals, BAT says the cigarette industry was last year marked by growing competition.