BAT posts lower final-quarter results, names new MD

PETALING JAYA: British American Tobacco (Malaysia) Bhd’s (BAT) net profit for the fourth quarter ended Dec 31, 2019 (Q4 FY2019) fell 18.3% to RM93.86 million from RM114.94 million a year ago, mainly attributed to lower volume as a result of severe legal market contraction.

However, its revenue increased 14% to RM662.45 million from RM770.62 million.

The board of directors has declared a fourth interim dividend of 33 sen per share.

For the full year period, BAT’s net profit went down 27% to RM343.81 million from RM470.72 million, while revenue dropped 11.1% to RM2.51 billion versus RM2.82 billion in the previous year.

Its 2019 financial performance marks the fourth consecutive year of declining revenue and profit from operations since the government’s surprise excise hike for tobacco in 2015.

BAT said total legal industry volume had declined 10% against the same period last year, on the back of the booming illegal cigarette trade that currently makes up 63% of the total industry volume, rising rapidly from 33.5% in 2015.

The company’s market share stood at 53.7%, a marginal decrease of 0.7ppt, primarily due to the premium and aspirational premium (AP) segment being impacted by the continuous downtrading, whereby consumers switch to cheaper alternatives and illegal cigarettes.

BAT Malaysia managing director

Erik Stoel said the industry outlook remains bleak as illegal cigarettes have reached new levels year-on-year.

On a separate note, BAT announced the appointment of Jonathan Reed as its new managing director to replace Erik Stoel with effect from April 1, 2020 subject to necessary formalities being completed.

Stoel, who has been at the helm since June 2016, will complete his tenure on March 31, 2020, following a one-month handover period to facilitate a smooth transition process.