BAT 4162 BRITISH AMERICAN TOBACCO (MALAYSIA) BERHAD's Q1 results hit by lower volume due to higher vape use, tobacco black matket
KUALA LUMPUR: British American Tobacco (Malaysia) Bhd (BAT Malaysia) posted a lower net profit of RM40.32 million for the first quarter ended March 31 2023 (1Q23) from a net profit of RM52.28 million a year ago.
Group revenue declined 25 per cent to RM390.23 million from RM521.56 million a year ago.
BAT Malaysia said the decline in revenue was due to lower volume prompted by the increase in vape usage and persistent tobacco black market.
The company posted an earnings per share of 14.10 sen against 18.30 sen from the previous year.
BAT Malaysia said its premium segment consisted of Dunhill's share grew 0.4 per cent, which further strengthened its market leadership.
The company's value-for-money brand, Rothmans, grew 2.7 per cent while its aspirational premium brand, Peter Stuyvesant, registered a growth of 5.3 per cent.
Overall, the company's total market share stood at 51.5 per cent, a decline of 0.4 per cent compared to Q1FY22.
Managing director Nedal Salem said BAT Malaysia was optimistic about its prospects in 2023 despite the economic headwinds.
"BAT Malaysia is maintaining the growth trajectory of its strategic brands within its premium, aspirational premium and value-for-money segments.
"This is in tandem with the company's aim to deliver combustible value growth, to support its multicategory portfolio of reduced-risk products. This is in line with our commitment towards building A Better Tomorrow," he said.
He added that BAT Malaysia was seeking to continue growing its tobacco heating product, glo which reflected its efforts to offer reduced-risk alternatives to adult smokers.
The company will also focus on investing in its value-for-money brands and maintain leadership in the premium segment.
"To this end, we aim to continue growing our tobacco heating product, glo, which represents our efforts to offer a choice of reduced-risk alternatives to adult smokers.
"We will also focus on investing in our VFM brands and maintaining leadership in the premium segment."
BAT Malaysia also expects the volatile economic environment to continue exerting pressure to its financial performance in the short-term.
"We expect this challenging operating landscape to stretch disposable income, leading to downtrading from legal products to tobacco black market options.
"Nevertheless, in the medium-term, we are confident that economic conditions will improve, whilst the government looks at introducing balanced regulations on vapour and accelerating their interventions to reduce the tobacco black market," it said.
Baltic dry index - 2483
1 minute ago