Société Ivoirienne des Tabacs (BRVM: STBC) reported a 4% increase in fourth-quarter sales volumes for 2025, but earnings declined sharply due to higher costs and exceptional charges.

Sales volumes rose to 2,000.3 thousand units in the fourth quarter, up from 1,923.9 thousand a year earlier. For the full year, volumes reached 7,037.9 thousand units.

Revenue for the quarter increased 8% to 72.9 billion CFA francs, compared with 67.4 billion CFA francs in the same period of 2024.

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Operating profit fell 61% year-on-year to 9.9 billion CFA francs, down from 25.2 billion CFA francs. Net income declined 74% to 5.1 billion CFA francs from 19.4 billion CFA francs.

The company said the drop in operating profit was driven by higher excise duties introduced in January 2025, which increased the cost of goods sold and reduced gross margins.

Exceptional charges also weighed on quarterly performance, affecting net income.

Despite the weaker fourth quarter, SITAB expects overall 2025 performance to remain positive, supported by solid results earlier in the year.

Key Takeaways

SITAB's results highlight the impact of tax policy changes on consumer goods companies in West Africa. While demand remained resilient, with volume and revenue growth in the quarter, margin pressure from higher excise duties significantly reduced profitability. The divergence between revenue growth and earnings contraction underscores the sensitivity of tobacco producers to fiscal adjustments. Looking ahead, profitability will depend on pricing strategy, cost management and the company's ability to offset tax increases without eroding market share. Full-year stability suggests that earlier quarters helped cushion the fourth-quarter decline, but sustained margin recovery will be critical in 2026.