BATU half year 2022 profit up buoyed by economic activity

British American Tobacco Uganda (BATU) unveiled its financials for the half year ended June 30th 2022 indicating growth in revenue, profit, and cost of operations.

Highlights

Revenues: The company’s gross revenues grew 12.09% to Ugx50.67Bn ($13.09Mn) from Ugx45.21Bn ($11.67Mn). Net revenues were up 14.26% to Ugx25.02Bn ($6.46Mn).

Operating Costs increased 15.55% to Ugx19.58Bn ($5.06Mn) in line with higher sales volumes.

Profitability. Operating profit edged up 9.84% to Ugx5.44Bn ($1.40Mn) while profit before tax rose 12.87% to Ugx5.59Bn ($1.44Mn). BATU reported a 13.61% increase in profit after tax (PAT) to Ugx3.87Bn ($1.00Mn) and earnings per share of Ugx78.91 ($0.02).

Balance Sheet: Total assets increased 7.21% to Ugx63.69Bn ($16.45Mn) while total liabilities jumped 51.11% to Ugx31.54Bn ($8.15Mn).

Half year revenues were up 12% to Ugx50.7b, and profit before tax up 13% to 5.6b. Company Secretary Nicholas Ecimu attributed the performance to improvements in the operating environment.

The first quarter of the year was characterized by increased economic activity largely due to the lifting of the Covid-19 containment measures by the government of Uganda. Despite this, the firm was hit by soaring fuel and commodity prices which constrained customer disposal income, negatively impacting the trading environment.

“illicit trade in tax evaded cigarettes remains a key challenge for us, our business partners and the overall economy,” Ecimu said. Estimated at 24% of the total market, illicit cigarette sales rob government of Ugx30b in annual tax revenue.  

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