HARARE, July 26 (The Source) – Cigarette maker BAT’s net income rose 27 percent to $4,6 million in the half-year to June, from $3,6 million achieved in the comparable period last year driven by improved efficiencies.
Gross profit increased from $11,9 million last year to $11,97 million. Selling and marketing costs increased by 12,5 percent to $2,16 million as the company increased marketing activities.
Sales were flat, with a slight increase in low priced segment brands.
“Volume increase of 0,2 percent was driven by Ascot, which grew 278 percent and marketing activities to stimulate demand in a constrained environment,” finance director Lucas Francisco told analysts on Wednesday.
Administrative expenses fell by 34 percent to $3,6 million from $5,5 million incurred in the comparable period last year.
Operating profit increased by 27 percent to $6,5 million as a result of a decline in expenses incurred in the period.
Managing director Clara Mlambo said the company’s market share stood at 78 percent.
Revenue declined marginally by 0,5 percent to $16,7 million from $16,8 million recorded in the comparable period last year as a result of a decline in volumes of the premium brand, Dunhill.
Cash generated from operations increased by 23 percent to $9,9 million relative to $8 million last year, driven by increased profitability, improved collections and delays in payments to foreign suppliers.
Total assets increased by 10,8 percent to $35,1 million on the back of an increase in cash and cash equivalents.
“Cash and cash equivalents increased by $7 million due to failure to remit dividends and delays in paying foreign suppliers,” Francisco said.
Francisco said cumulative dividends owed to foreign investors stood at $8 million, minus the interim dividend of 22 cents per share declared for the period.
The company expects the trading environment to remain challenging, particularly in view of the ongoing dollar note shortage, challenges to settle foreign payments and continued strain on disposable income.