NAIROBI, Kenya, July 20 – British American Tobacco’s (BAT’s) profit in the half-year to June dropped by Sh100 million to Sh2.8 million, weighed down by high inflation and a rise in input costs.
The tobacco manufacturer’s profit was a slight drop from the Sh2.9 billion that it earned in a similar period last year.
“During the period, the business performance was impacted by global macroeconomic volatility, inflationary increases in input costs and geo-political disruptions in some of our key export markets,” the firm said in a statement yesterday on local dailies.
“This was further compounded by excise-led price increases in the domestic market which triggered lower sales, downtrading to lower priced brands and exacerbated the prevalence of illicit trade in tax evaded cigarettes,” it added.
Likewise, earnings after deduction of excise duty and value-added tax dropped from Sh21.86 billion to Sh20.99 billion in the period.
BAT was last year impacted by a 16 percent excise duty hike on tobacco products that ate into earnings.
In the review period, the Nairobi Securities Exchange (NSE) company paid Sh9.4 billion in the form of VAT, PAYE, and corporation tax.
