BAT Q2 Net Profit Dips to RM186mil

Source from:  The Star 07/23/2010

PETALING JAYA: British American Tobacco (M) Bhd's (BAT) net profit for the second quarter ended June 30 declined 7.65% to RM185.84mil compared with RM201.24mil a year ago on lower volumes amid down-trading by consumers and high levels of illicit cigarette trading. Revenue for the quarter under review came in at RM993.87mil, a rise of 1.65% from RM977.65mil in the previous corresponding period. For the first half year, its revenue rose 1.5% to RM2.01bil against RM1.98bil in the previous corresponding period while its net profit dropped 7.2% to RM377.3mil from RM407.2mil before. BAT attributed the lower net profit to lower volume, higher packaging cost, and timing of marketing and overheads. It has declared a first interim dividend of 113 sen per share for the period under review. Managing director William Toh said in a statement that industry volumes contracted by 0.9% in the first-half compared with the previous year, benefiting from the country's double-digit economic growth and a slight reduction in the volume of smuggled cigarettes. He said despite the slight reduction, smuggled cigarettes remained a major thorn in the industry, as they made up 37.1% of all cigarettes sold. Toh said despite the decline in profit and revenue, BAT's portfolio of brands performed commendably, recording a market share of 60.3% in the first five months of the year, an increase of 0.3 percentage points compared with the same period last year. He added that in the premium segment of the market, BAT's share stood at 73.9%. "Given the demanding environment and barring unforseen circumstances, we maintain our expectation that the financial results for the year will be satisfactory at best." He noted that as the ban on packs with less than 20 sticks was still in the early stages, the full impact had yet to be realised. Enditem