BRITISH American Tobacco (BAT) has recorded a 60,68% jump in profit-after-tax (PAT) from $4,61 million to $7,41 million for the half year period ended June 30, 2018.
BY TATIRA ZWINOIRA
The profits were driven by increased sales volumes.
In a financial statement accompanying the company’s results yesterday, BAT chairperson Lovemore Manatsa said during the period under review, total sales volumes increased by 21% compared to the same period last year.
“In the six months to June 2018, total sales volumes grew by 21% versus the same period last year. This was driven by growth in all segments. The premium brands recorded a growth of 37%, the value for money brands attained a 16% growth and the low value for money brands achieved a growth of 285%,” Manatsa said.
“Total revenues were $19,9 million, constituting an increase of $3,2 million (19%) versus the same period last year. Gross profit for the six months increased by $2,6 million (22%) to $14,6 million compared to the same period last year, driven by increased sales volumes and efficiencies in the cost of production.”
The increased volumes moved during the period under review as a result of an increase in the selling and marketing costs, which were up 19,37% to $2,58 million from a 2017 comparative of $2,16 million as the company aggressively marketed its brands.
Administrative expenses were down about 37,3% to $2,28 million compared to the 2017 comparative period of $3,64 million showing the company’s cost containment strategy.
The increase in revenue and profit after tax left the company with a very positive net profit margin of 50,89% showing going into its second half that the company was in a profitable position.
Cash generated during the period was up 2% to $11,9 million against 2017’s $11,7 million comparative.
In terms of liquidity, BAT posted a current ratio of 1,36 showing the company was in a position to cover its current liabilities if they come due.
“Consequently, the company’s earnings per share increased by 64% to $0,36 from $0,22 generated in the same period last year,” Manatsa said.
“The company continues to hold in high regard the interest of its shareholders through a competitive dividend policy. In line with the profit and cash generated in the six months ended June 30, 2018, the board has declared an interim dividend of $0,30 per share, an increase of 36% compared to the same period last year.”