BAT 2009 3Q Net Profit Down 28%

Source from:  The Edge Daily 11/20/2009

British American Tobacco (Malaysia) Bhd (BAT) recorded net profit of RM166.73 million in the third quarter ended Sept 30, down 28% from the RM232.22 million a year ago as sales were affected by illicit cigarettes. The company said on Thursday, Nov 19, that revenue fell 16.2% to RM919.19 million from RM1.097 billion. Earnings per share were 58.4 sen versus 81.3 sen. It declared a second interim dividend of 61 sen per share, tax exempt. BAT said, on the pre-tax level, profit declined 25.7% to RM234.5 million from RM315.62 million a year ago. When compared with the preceding quarter's pre-tax profit of RM270.1 million, there was a 13.2% decline due to the 6.1% contraction in legal volumes compared to the previous quarter as a result of continued pressure from a high level of illicit cigarettes. "However, the full impact of volume contraction was partially offset by higher net pricing, improved sales mix and productivity savings from various cost-management initiatives implemented," it said. BAT Malaysia managing director William Toh said: "The operating landscape continues to be extremely challenging as the level of illicit cigarettes continued with its upward trend compounded by current economic crisis that is affecting consumer's spending power." According to the latest Illicit Cigarette Survey conducted by the Confederation of Malaysian Tobacco Manufacturers for the period between June and August 2009, the level of illicit cigarettes rose from 36.7% to a new record high of 38.7%. "In view of current high level of illicit cigarettes, the latest more moderate increase of one sen per stick in excise on cigarettes which took effect Oct 1, will hopefully assist the industry to mitigate some of the loss of legal volumes to the burgeoning illicit trade. "This approach coupled with strong enforcement initiatives, implementation of stricter penalties and creating more awareness on the dangers of this menace will help to bring down the current high level of illicit cigarettes," said Toh. Enditem