BAT Kenya

BAT Kenya: Half Year Net Profit Up 8.6%

British American Tobacco Kenya Ltd. recently reported its results for the six months ended June 30, 2009. The company reported Ksh.858 million in profits after tax, a 8.6 % rise over the same period last year.  BAT’s gross turnover stood at Ksh.9 billion representing a 10% increase from Ksh.8 billion in the first half of 2008. Net cash from operating activities increased by 750% from 73 million to KES621 million in the six month period ended June 30 2009. Cash generated from operations increased by 204% to KES 1 billion from KES 387 from a year ago.

MANAGEMENT COMMENTARY
The business environment in the six month period to 30 June 2009 was challenging with continued high inflation rates leading to considerable pressure on disposable incomes. The level of insecurity has also increased to alarming heights which in turn has raised the cost of doing business.

During this period overall sales volumes declined by 12% against same period of 2008 driven by performance in the contract manufacture business stream and the domestic market. Conversely, gross turnover and profit before tax grew by 10% and 9% respectively, compared to the same period last year as a result of positive foreign exchange rates impact on turnover and pricing decisions.

The 2009/10 Finance Bill maintained the hybrid structure of excise, which combines both product characteristics and retail selling price, with physical characteristics being the dominant factor. We welcome the move by Government to hold excise tax rates as this will go a long way in addressing the threat posed by illicit trade and safeguard sustainability of government revenues from our industry.

The Directors are pleased to announce an interim dividend of KES4.50 per KES10 ordinary share in respect of the six months period to 30 June 2009. Dividend payment is subject to withholding tax and the dividend will be paid on 4 September 2009 to shareholders on the register at the close of business on 14 August 2009.

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