ZIMBABWE Stock Exchange-listed cigarette-making firm British American Tobacco Zimbabwe (BAT) has said cigarettes sales volumes declined by 17% during the year ended December 31, 2013 due to a shrink on the cigarette market in the country.
Victoria Mtomba
Speaking at an analyst briefing yesterday, BAT Zimbabwe finance director Peter Doona said Dunhill volumes grew by 48% compared to last year off a small growing consumer base.
“Industry volumes declined exacerbated by economic stagnation and lack of disposable income. The decrease in sales volumes was experienced across all our brands,” Doona said.
Doona said the company, during the period under review, recorded a 14% decline in revenue to $44,5 million compared to the same period in 2012 due to the discontinued export of cut rag to Mozambique. During the period under review, the company posted $3,8 million profit.
Doona said operating profit reduced to $9,8 million from $17,6 million in 2012 due to a share-based payment expense of $10,9 million which represent total value of shares and dividends awarded to employees under the Employee Share Ownership Scheme.
BAT gave 10% of its stake to its share trust and 10,74% to local farmers.
Official figures show that before surrendering the stake to the Employee Share Ownership Trust, local investors held 6,22% of BAT’s issued share capital.
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He said cash generated from operations stood at $17,7 million. The cigarette making company is targeting 1 450 billion sticks of cigarettes this year.
The company’s managing director Lovemore Manatsa said the conditions of trading are expected to remain challenging due to the economy which is not performing well. Industry cigarettes volumes have reduced as a result of the slowdown in Gross Domestic Product growth and the ongoing general affordability and liquidity challenges the consumers are facing.
Manatsa said the company will continue to invest in Zimbabwe and has no plans to exit the country. The company declared a $0,18 dividend to its shareholders.
The company manufactures, distributes and sells cigarettes throughout the world.
