Despite a difficult operating business environment as a result of Covid-19, British American Tobacco Uganda (Batu) registered an increase in net profit by Shs4.278b for the period ended December 2020.
According to results released at the weekend, during the period Batu saw profit after tax increase from Shs15.6b in 2019 to Shs19.9b.
Profit before tax increased by 30 per cent to Shs29b, reflecting the growth in profit from operations and higher net finance income.
However, the company said Covid-19 had presented challenges during the period that impacted the business, worsening an already challenging operating environment.
Nonetheless, Batu said it will continue to focus on ensuring employee health and safety, business continuity and working with relevant government agencies to ensure stability and predictability in the regulatory environment, which will support economic recovery.
Whereas the company demonstrated resilience amid a challenging business environment, details indicate in the 12 months to December gross revenue reduced by 1 per cent to Shs162b due to lower sales volumes that could have been occasioned by Covid-19.
Net revenue increased by 5 per cent to Shs79b primarily driven by an improved product mix compared to 2019 when it registered net revenue of Shs75.4b.
Cost of operations reduced by 5 per cent to Shs50b in line with lower sales volumes, as well as pragmatic cost saving initiatives undertaken to cushion business profitability from the impact of Covid-19.
Details from the financial report also indicated that the decline in cost of operations more than offset the reduction in gross revenue, resulting in an increase in operating margin by seven percentage points to 37 per cent.
Cash generated from operations increased by 50 per cent to Shs27b, driven by improved profitability and benefits of effective working capital management while net assets increased to Shs54.7b compared to Shs50.3b in 2019.