Update BAT declares interim dividend of 78 sen per share

by **Cals** Wed 23 Jul 2014, 01:33

Update BAT declares interim dividend of 78 sen per share

Business & Markets 2014

Written by Ahmad Naqib Idris Adzman Shah of theedgemalaysia.com

Tuesday, 22 July 2014 18:46

KUALA LUMPUR (July 22): British American Tobacco (M) Bhd’s (BAT) net profit climbed 18% to RM248.1 million for its second financial quarter ended June 30, 2014 from RM210.82 million in the preceding year’s corresponding quarter.

Revenue for the quarter rose 6% year-on-year to RM1.23 billion from RM1.16 billion in the previous corresponding quarter.

The group declared a second interim dividend payment of 78 sen per share for the financial year ending Dec 31, 2014.

BAT attributed the improved revenue “to the cumulative effect of the June 2013 price increase and the September 2013 excise led price increase on the domestic business, partially offset by a 14.9% decline versus the same period last year in the contract manufacturing revenue”.

BAT noted that its market share remained almost flat for the period up to May 2014, despite the price increase driven by the excise duty hike in Sept 2013 which had pressured its premium portfolio.

“Dunhill recorded a share increase of +0.1 percentage point, with growth being observed in the lights and menthol variants that managed to more than offset the decline of its full flavour franchise,” said the group.

Meanwhile, its Peter Stuyvesant brand improved market share by 0.8 percentage points, while Pall Mall’s market share declined by 0.7 percentage point compared to the same period last year.

Going forward, BAT remains concerned over the general decline in the legal cigarette market due to the impact of the illegal cigarette trade.

However, the group is encouraged by the enforcement actions taken by the Royal Malaysia Customs in addressing the issue that started in the first quarter of the year.

“The performance of the company in 2014 will continue to be dependent on the effectiveness and sustainability of enforcement activities against the illegal cigarettes trade.

“Despite the circumstances and the ongoing business challenges, the group is pleased with its first half performance and remains cautiously optimistic for the year ahead subject to the factors outlined above,” said BAT.

For the six-month period ended June 30, BAT’s net profit rose 14% to RM473.49 million from RM415.03 million the year before, while cumulative revenue increased 6% to RM2.38 billion from RM2.25 billion.

BAT’s share price closed 16 sen or 0.23% lower today at RM68, bringing its market capitalisation to about RM19.42 billion.