In 2018, three years after a major restructuring that dragged the company’s profits down in 2015 and 2016, British American Tobacco Uganda continued to grow revenue and profit, though at a slower pace than in the previous year.
The company, which trades on the Uganda Securities Exchange, reported a net profit of Shs13.7bn in 2018, up from Shs12bn a year before. That indicates a growth of 13.8%, markedly less than the 54.6% increase recorded in 2017.
The results of the company’s primary business, however, were less robust. Gross revenue — which is total cigarette sales less incentives and rebates to distributors — rose by 2.9% to Shs154bn, down from the 8.2% growth a year before.
In a note to the financials signed by its company secretary, Nicholas Ecimu, BAT Uganda said the growth in gross revenue was driven by an increase in cigarettes prices in response to excise tax increases. Taxes on the company’s cigarettes — which include excise duty and value added tax — — rose by 4% from the year before to Shs84.2bn.
Even then, according to the note, the rise in sales was “partially offset by lower volumes as a result of consumer-affordability challenges and the impact of illicit trade.” The company claims that the market share of illicit cigarettes averaged 22% in 2018.
BAT Uganda also reported its first increase in operating expenses in four years by 1% to Shs49.8bn, which it attributed to inflationary pressures. Operating profit climbed to Shs19.9bn from Shs19.3bn in 2017.
The company’s pretax profit was boosted by Shs42m in foreign exchange gains and a reduction in finance costs, rising 13.7% from $17.5bn in 2017 to Shs19.9bn. Income taxes came in at Shs6.2bn, up from Shs5.5bn.
BAT Uganda’s earnings per share, or the net income earned per share of stock, grew by 13.8% to Shs280. If approved, the note signed by Mr Ecimu said, the dividend “will be paid on 21 June 2019 to shareholders whose names appear on company’s share register at close of business on 31st May 2019.”