BAT Expects Steady Revenue Growth This Year

Source from:  BERNAMA 04/21/2009

British American Tobacco (M) Bhd expects a steady revenue growth for financial year ending Dec 31, 2009 despite a challenging year, its managing director Jack Bowles said. However, the growth would depend closely on the country's economy this year, he told a media briefing after the company's annual general meeting here, Monday. He said for the full year ended 2008, BAT's revenue grew by eight percent as compared to 2007's and it posted a net profit of RM812 million despite a 1.5 percent decline in the overall industry volume. "In 2008, we managed to grab a strong portfolio. However, there are two matters that we can't control -- the size of the total market and the growth of illicit trade," he said. Bowles said the size of total market had gone down by 18 percent in the last quarter of 2008 while the ilicit trade had grown by an average 25.6 percent of total cigaratte sales last year. "We are certainly appreciative of the efforts taken by enforcement agencies like the Customs to stop the illegal trade and we also believe that if not for their efforts, the problem could have been much worse," he said. Bowles said the size of the illegal market has grown and it would affect the goverment's revenue. "The illicit activities cost the government about RM1 billion in lost taxes," he said. He said the government, in an effort to reduce smoking, has increased the taxes for the past two years. Bowles called on the goverment to consider applying a gradual rate of tax system for cigarettes in the future. "Malaysia is considered one of the countries with the most expensive cigarette price compared to neighbour, Singapore," he said. On the implementation of photographic health warnings against smoking on the cigarette packet, Bowles said it has not affected sales so far. "However, it is expected to decrease the volume of sales this year by an average of two percent," he said. Enditem