- Revenue increased from ZW$1.5 billion in 2019
- Operating profit increased by 1,077% from a loss of ZW$26m in 2019
- Shelves dividend
HARARE – British American Tobacco (BAT) Zimbabwe Holdings Limited which manufactures, distributes, and sells tobacco products for local consumption through a network of independent retailers and distributors, saw its annual revenue jump 40% year on year to ZW$2.1 billion (US$24.9 million using current interbank rate) in 2020, according to the financial results the company released on March 31.
During the reporting period, BAT’s gross profit amounted to ZW$1.1 billion, increasing by ZW$18 million or 2% compared to 2019.
The Company’s chairperson Lovemore Manatsa said the growth in revenue was driven by price increases as well as revenue generated from the export of cut-rag tobacco. This subsequently triggered the growth in gross profit.
The Company’s total sales volumes for the year under review declined by 12% compared to the previous financial year, which when looking at the wider economy reflects the impact of high inflation which has eroded the disposable income of consumers, thereby depressing domestic demand.
Selling and marketing costs increased by ZW$149 million which was 118% higher in comparison to the same period in prior year.
“This was mainly driven by additional marketing investments and strategic initiatives which were implemented by the Company so as to respond to, and, to satisfy the consumer preferences,” said Mr Manatsa.
Administrative expenses were ZW$204 million (156%) higher than the previous year, driven by a general increase in costs while other losses increased by ZW$106 million (39%) due to the devaluation of the local currency and foreign exchange losses on foreign creditors.
As a result, operating profit increased by ZW$282 million (1,077%) versus an operating loss of ZW$26 million recorded in the prior year.
In addition, net profit attributable to shareholders for the period under review was ZW$61 million compared to a net loss of ZW$124 million in 2019, recording a growth of 149%.
The Company’s earnings per share increased to ZW$3.51 from a negative ZW$7.15 generated in the previous year.
Mr Manatsa said that cognisant of the economic challenges faced, the economic challenges, the Board has not declared a dividend for the year ended 31 December 2020 to allow for reinvestment into the operations of the Company.
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