British American Tobacco Uganda Limited reported a 52% decline in half year profits on Thursday, reflecting the change in its business model that saw the company discontinue its leaf business.
Unaudited net profit for the first six months of this year was Shs7.32 billion, compared to Shs15.24 billion in the same period last year. There were no leaf revenues this year, according to the results statement, leading to a 70.9% decline in net revenue to Shs34.16 compared to the same period last year.
Leaf revenues in the first six months of 2015 contributed Shs82.14 billion to net revenue, which was Shs117.4 billion.
Earnings per share declined to Shs149, compared to Shs311 in the first half of 2015. Shares of BAT Uganda have gained 30.55% since the start of 2016, and risen by 251.91% in the past year.
The results show a 20.20% increase in shareholders’ equity, which stands at Shs34.16 billion compared to Shs48.20 billion in the first half of 2015. This reflects the growth in net assets last year, arising from the sale of the company’s leaf business.
The company also reported an increase in total taxes paid in the first half of 2016 to Shs39 billion compared to Shs37.3 billion the same period last year.
It has also issued a profit warning for 2016, saying net profit is expected to be 20% lower than in 2015 because of its restructuring.
It is the first listed company to release its half year results for 2016.