BAT profit rises 7.6% on pre-GST demand

PETALING JAYA: British American Tobacco (M) Bhd’s (BAT) net profit for the first quarter ended March 31 rose 7.6% to RM241.74mil from RM224.56mil a year ago, due to strong volume driven by an “abnormal demand” from customers and consumers ahead of the goods and services tax (GST) implementation on April 1.

The tobacco company’s revenue for the quarter climbed 10.4% to RM1.27bil from RM1.15bil previously.

Earnings per share was at 85.20 sen, while net assets per share stood at RM2.03.

In a filing with Bursa Malaysia yesterday, the company said the strong sales volume was mainly contributed by the domestic and duty-free business.

It added that the growth, however, was partially offset by inflationary increases in raw materials, the impact of the November 2014 excise increase and one-off expenses associated with business restructuring, mainly in the production area as a consequence of overall volume decline.

BAT has also declared a first interim dividend of 78 sen per share, which amounts to RM222.71mil. The payout will be made on May 28.

The company said its market share declined marginally by 0.1 percentage point to 61.1% from 2014 (full year). “This represents a commendable share performance despite the price increase in the fourth quarter of 2014.”

BAT said Dunhill’s market share had declined slighly to 46.4%, but maintained its market leader position.

Moving forward, BAT said it would continuously monitor the impact that the economic situation, both within and outside Malaysia, might have on consumers’ disposable incomes.

“The illegal cigarette trade in Malaysia remains a key challenge in 2015 for the legal tobacco industry,” it said.

It noted that the efforts taken by the Royal Malaysian Customs in 2014 in addressing the illegal cigarette trade had seen the share of illegal cigarette trade declining to 32.8% in 2014 from 38.9% in the fourth quarter of 2013.