BRITISH American Tobacco (M) Bhd (BAT Malaysia) saw its revenue inched up 7% to RM637.46 mil during its 2Q FY2022 ended June 30, 2022 (1Q FY2021: RM595.8 mil) on continued growth achieved by Dunhill and its value-for money (VFM) brands.
However, the 1H FY2022 revenue for Malaysia’s only listed cigarette manufacturer was flat at RM1.16 bil against the same period last year.
Its profit from operations during 2Q FY2022 stood at RM109 mil, largely driven by domestic volume growth which added up to RM191 mil for the 1H FY2022 period. This is slightly lower than the RM193 mil posted in the first half of last year.
A second interim ordinary dividend of 25 sen/share amounting to RM71 mil has been declared for shareholders (to be paid out on Aug 18).
More broadly, the group’s volume for the 1H FY2022 remained consistent with that of 1H FY2021 due to the dip in demand during the onset of the Omicron variant in 1Q FY2022 which was offset by gradual consumption recovery during the endemic phase in 2Q FY2022.
Its strategic brands continued to show encouraging share performances with Dunhill’s share of premium segment grew by 0.9 percentage points (ppt) to 62% which further strengthens BAT Malaysia’s market leadership position.
The group’s VFM brands also grew by 0.7ppt to 34.9% share of segment as compared to the same period last year.
However, BAT Malaysia’s share of the “Aspirational Premium” segment contracted by 3.3ppt to 41.2% as a result of the portfolio optimisation strategy in delisting Pall Mall during 1H 2022.
“BAT Malaysia has maintained a steady performance for the first half of this year, a clear indication that we are on the right path to enhance our prospects and maximise returns to our shareholders,” commented the company’s managing director Nedal Salem.
“For our 2H FY2022, we will continue our focus towards building A Better Tomorrow (business motto) with an emphasis on reducing the health impact of our business.”
Elaborating further, Nedal said while BAT Malaysia is encouraged by the Government’s commitment to regulate the vape industry, the relevant authorities must adopt policies that are evidence-based and data-driven “to ensure the over one million Malaysian vape users have access to reduced-risk products that are compliant with quality and safety standards”.
“BAT Malaysia will strongly support any sensible, pragmatic regulations on vaping, in tandem with our purpose to build A Better Tomorrow,” he added.
Similarly, Nedal said the Government must also continue its push towards curbing the tobacco black market in Malaysia.
“The illegal cigarette trade currently commands around 60% of the total market in Malaysia. Over the last five years, the Government has already lost some RM25 bil in tax leakages to the illegal cigarette market,” he pointed out.
“Smugglers are now being more creative in smuggling via small coastal jetties. BAT Malaysia urges the Government to take effective enforcement actions to shut these channels down while also addressing the affordability pressures faced by consumers.”
At the close of yesterday’s (July 21) trading, BAT Malaysia was up 16 sen or 1.54% to RM10.52 with 417,100 shares traded, thus valuing the company at RM3 bil. – July 22, 2022
