MALAYSIA’S only listed cigarette manufacturer British American Tobacco (M) Bhd (BAT Malaysia) is cautiously optimistic of achieving an improved financial performance in its FY2024 as it continues to invest and grow Vuse which it claims to be the #1 global vaping brand.
This comes about as the group stands firm that harm reduction strategies are crucial in reducing the health impact of its business, according to its managing director Nedal Salem.
“The group is also supportive of the Control of Smoking Products for Public Health Bill 2023 which was passed during the parliament session in December 2023,” he pointed out in a media statement.
“As the government develops the regulatory framework for tobacco and vapour products under this new law, we reiterate that any regulations introduced must be sensible and evidence-based for all stakeholders.”
Nedal who has been helming BAT Malaysia since August 2021 said this is crucial to ensure effective enforcement and to deliver its intended objectives “without fuelling the growth of the tobacco black market and creating a black market for vapour”.
“The tobacco black market incidence in Malaysia remained persistently high at 55.6% for 2023,” he pointed out.
“We therefore urge the government to implement the measures announced in the Budget 2024 as soon as possible to combat the tobacco black market and help recover revenue leakages for the government.”
Earlier, Nedal reiterated that BAT Malaysia had in its 4Q FY2023 continued with its strategy of growing its multi-category portfolio driven by investments into its new category business which offers reduced-risk alternatives to adult smokers.
Compared to the preceding quarter, the increase in combustible volume alongside the sale of vapour products during that quarter gave rise to a 4.8% increase in revenue from RM607 mil to RM636 mil.
However, sizeable investments were incurred to build brand visibility and credentials in view of the group’s major launches of its Vuse products during its final financial quarter, hence leading to the group’s profit from operations incurring a 24.5% dip from RM85 mil to RM64 mil quarter-on-quarter.
As per its Bursa Malaysia’s results announcement, BAT Malaysia posted a lower net profit for its 4Q FY2023 at RM47.36 mil against RM61.73 mil (a 23.3% reduction) in the corresponding FY2022 quarter while its revenue retreated 17.5% to RM635.86 mil from RM770.66 mil a year ago.
For the entire FY2024, BAT Malaysia saw its net earnings declined 25.8% to RM194.75 mil from RM262.52 mil previously while its revenue was 11% lower at RM2.31 bil against RM2.59 bil in FY2022.
At 9.03am, BAT Malaysia was 3 sen or 0.33% lower at RM9.05 with 58,000 shares traded, thus valuing the company at RM2.58 bil. – Feb 7, 2024