BRITISH American Tobacco (M) Bhd, Malaysia’s only listed cigarette manufacturer, expects to fuel its growth in FY2024 by pushing to realise its tagline of “Building a Better Tomorrow” while focusing on growing its new category business and driving sustainable value growth within its combustibles category.
Towards this end, the company firmly believe that tobacco harm reduction strategies are crucial to reducing the health impact of its business, according to its managing director Nedal Salem.
“We will focus on growing the market share of Vuse, the number one global vaping brand which represents the group’s efforts to offer reduced-risk alternatives to adult smokers,” he pointed out when sharing BAT Malaysia’s FY2024 strategies at the company’s recent 63rd Annual General Meeting (AGM).
“At the same time, we will continue maintaining the growth trajectory of our brands within our premium, aspirational premium and value-for-money segments. This is in tandem with the group’s strategic aim to deliver combustible value growth to support our portfolio of reduced-risk products.”
Sharing its views on its upcoming Control of Smoking Products for Public Health Act 2024, Nedal said BAT Malaysia believes that the law is a step in the right direction towards regulating the cigarette industry.
“Nevertheless, the group reiterates that any regulations introduced must be sensible and evidence-based for all stakeholders to ensure that it can be enforced effectively and deliver its intended objectives, without fuelling the growth of the tobacco or vapour black market,” justified Nedal who has been helming BAT Malaysia since August 2021.
As it is, the tobacco black market incidence in Malaysia remained persistently high at 55.6% for 2023.
With the measures announced by the government during the tabling of the Budget 2024, BAT Malaysia expects the government to further strengthen efforts to combat the tobacco black market coupled with recent proactive enforcement initiatives to help recover tax revenue leakages in excess of RM5 bil annually.
“The group believes that it is essential for all stakeholders, including BAT Malaysia, to collaborate closely by developing a comprehensive strategy to address the tobacco black market,” added Nedal.
Below are some financial highlights from BAT Malaysia’s FY2023:
- Revenue was recorded at RM2.3 bil for FY2023 compared with RM2.6 bil for the previous financial year due to continued downtrading and underlined the importance of the group’s introduction of a dynamic value-for-money (VFM) product in Luckies.
- Profit from operations stood at RM281 mil compared with RM407 mil a year ago.
- The group’s financial performance was buffered by the encouraging performance of the group’s vapour category launches during 2H 2023. This underlined the importance of the group’s re-investment into the new category segment.
- For FY2023, the group saw a decline in overall market share of 0.5% as its premium brands’ share of market declined by 0.9%. However, the group’s market share for VFM brands improved by 0.5% owing mainly to the timely launch of Luckies.
- The group experienced a 12.9% volume decline for the year.
- In line with the group’s performance, its board declared a fourth interim dividend of 15 sen/share which amounted to RM42.8 mil which was payable on Feb 21 to shareholders.
At the close of today’s trading, BAT Malaysia was up 5 sen or 0.57% to RM8.75 with 95,000 shares traded. – May 15, 2024