Giant cigarettes manufacturer, British American Tobacco Zimbabwe (BAT), continue to lead the cigarette industry despite sales volumes declining by 21% for the year ending 31 December 2016.
BAT Chairman, Lovemore Manatsa blamed the decline in sales volumes to the constrained economic environment remained which was characterized by weak consumer demand resulting principally from weak macro-economic performance.
“The year recorded low production levels across various sectors of the economy. Agricultural output was depressed by the recent El Nino induced drought, whilst natural resources output was negatively affected by the depressed commodity prices on the international market,” said Manatsa.
Total revenues were US$34.1 million, a 25% reduction compared with the same period in the prior year. This was mainly due to the decrease in sales volumes as a result of the economic environment.
Consequently, gross profit for the period declined by US$7.6 million (24%) to US$24.7 million, compared to the period ended 31 December 2015.
Selling and marketing costs increased by US$0.4 million (9%) compared to the period ended 31 December 2015, due to increased marketing activities carried out to defend the Company’s sales volumes.
Other incomes decreased by US$1.2 million (42%) compared to the period ended 31 December 2015 driven by the once off income from the property sale in 2015.
Operating profit decreased by US$8.9 million (43%) compared to the period ended 31 December 2015, to close at US$11.9 million.
Net profit attributable to shareholders for the period was US$8.5 million which was down by US$7.0 million compared to the period ended 31 December 2015. This represents a decrease in earnings per share to US$0.41, down from US$0.75 for the period ended 31 December 2015.
Cash generated from operations was US$13.3 million, which is a decrease of 13% against US$15.3 million achieved in the period ended 31 December 2015. The decrease was mainly due to a profit decrease offset by improved collections, delays in payments to foreign suppliers and a decrease in stock holding.
In view of the profit for the period ended 31 December 2016 and considering our dividend policy, the Board is proposing the declaration of a final dividend of US$ 0.33 per share.
This, together with the interim dividend of US$0.18 per share, brings the total dividend for 2016 to US$0.51, a decrease of 44% versus 2015.