Kenya: BAT Profit Rises Nine P.C. to Sh1.2 Billion

Source from:  The Nation 07/20/2009

Nairobi - British American Tobacco Limited has reported a 9 per cent increase in its pre-tax profit to Sh1.2 billion for the six months ended 30th June. This is an improvement from Sh1.1 billion the company reported in the same period last year. The board of directors said the results were achieved against the background of a challenging environment with high inflation rates that had put pressure on disposable incomes. Exports products Overall sales volumes declined by 12 per cent compared to the same period last year driven by performance in the contract manufacturing business stream and domestic market. The company exports 65 per cent of its products made in Kenya through contract manufacturing. The Nairobi plant serves as its regional manufacturing hub serving 16 countries. Gross turnover grew by 10 per cent compared to the same period last year as a result of positive foreign exchange rates impact on turnover and pricing decisions. The board said it was satisfied with the 2009 Finance Bill, which maintained hybrid structure of excise that combine both product characteristics and retail selling price with physical characteristics being a dominant factor. "We welcome the government's decision to hold excise tax rates as this will go a long way in addressing the threat posed by illicit trade and safeguard sustainability of government revenues and from our industry," the firm said. The company had called for reduction in the tax tiers from four to two and a reduction in excise tax ahead of this year's budget read in June. BAT's chief executive officer Gary Fagan had said the company had experienced compounded excise increase of more than 60 per cent in one year which had opened ground for illicit products that were estimated at 12 per cent on the local market. The board recommended an interim dividend of Sh4.50 per Sh10 ordinary share in respect to the six months up to June 30, 2009 for shareholders who will be on the register by August 14. Payment will be made on September 4th. Enditem