BRITISH AMERICAN TOBACCO RECORDS LOWER PRE-TAX PROFIT

Source from:  Bernama 04/24/2009

British American Tobacco (Malaysia) Bhd has recorded a lower pre-tax profit of RM272.783 million for its first quarter ended March 31, 2009, compared with RM285.142 million in the same period last year. Revenue also declined by 1.5 percent to RM1.006 billion from RM1.021 billion previously due to lower sales volumes which eroded gains from higher net pricing and improved product mix, BAT Malaysia said in a statement today. According to the company, overall industry volumes for the first quarter as measured by the Confederation of Malaysian Tobacco Manufacturers members' sales declined by nine percent due mainly to the increasing levels of illicit trade and impact of the global economic crisis affecting consumer spending power. "Despite the lower volumes, the group's portfolio after a strategic reconfiguration over the last nine months and a period of investment has performed strongly, especially in the premium segment with Dunhill achieving its highest ever market share," it said. BAT Malaysia's managing director Jack Bowles said it is anticipated that the tobacco industry volume will continue to be pressured by the high level of illegal cigarettes which is a great concern to the industry. The legal industry's loss in volumes translated to significant tax losses to the government, he said. According to Bowles, a loss in legal volumes does not automatically translate however into a reduction in consumption as the high level of illicit trade coupled with the current economic uncertainty will lead price-sensitive consumers to go for cheaper illegal cigarettes. Enditem