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Kenya: BAT Half Year Profit Rises to Sh790 Million
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The Nation (Nairobi)
22 July 2008
Posted to the web 22 July 2008
Kennedy Senelwa
Nairobi
British American Tobacco Kenya Ltd has announced Sh790 million pre-tax profit for the six months ended June 30, 2008. This is a five per cent rise over the same period last year.
BAT's trading results sent to the Nairobi Stock Exchange show that the pre-tax profit rose from Sh753 million in the first half of last year to Sh790 million in the period under review.
Company secretary R T Ngobi said the six months period to June 30, 2008 was extremely challenging due to post-election turmoil as inflation rose putting further pressure on businesses across Kenya.
"Contract manufactured volumes grew by 3 per cent and domestic volumes benefited from improvements made last year in our distribution capabilities and fight against illicit trade," said Mr Ngobi.
As a result, BAT's turnover stood at Sh8.1 billion representing a 16 per cent increase from Sh7 billion in the first half of 2007. Contribution to Government revenues rose by 25 per cent.
The company paid Sh3.5 billion as excise duty and Value Added Tax to the Government, reflecting an increase of 25 per cent from Sh2.7 billion in the first half of last year.
BAT said the introduction in the Finance Bill 2008/9 of a new hybrid structure of excise combining both product characteristic and retail selling price in taxing cigarettes is welcome as it will ease enforcement.
"However, for the second year running the rate increase was high, averaging 31 per cent across our portfolio.
These successive above-inflation increases could act as an incentive to illicit trade," said Mr Ngobi.
He said BAT supported the development of the Tobacco Control Act which became effective on July 8, 2008 and said the company has worked hard to be complaint and raise public awareness.
"If objectively implemented, this is a balanced piece of legislation and we expect the current confusion to be temporary," said the company.
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The firm will pay a first interim dividend of Sh4.50 per ordinary share of Sh10 in respect of six months ended on June 30, 2008. Payment is subject to withholding tax.
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