LISTED cigarette manufacturer, British American Tobacco (BAT) has recorded a 74% jump in exports of cut rag tobacco on the back of increased demand abroad.
Presenting the group’s performance for the half year period ended June 30 2022, BAT chairman, Lovemore Manatsa said despite economic headwinds, the segment fared very well.
“Export volumes of cut rag tobacco were up by 74% in the period under review, compared to the prior year due to increased demand of leaf from our export markets,” he said.
The growth of exports falls in sync with current calls by the government urging companies to take advantage of the avenue in order to boost internal foreign currency revenue generation.
During the period ,revenue increased by 71% to reach ZW$6,9 billion when compared to the same period in 2021 attributed to price increases affected during the period thereby prompting a gross profit increase of ZW$2,8 billion.
Selling and marketing costs increased by ZW$314,4 million to register a 65% increase compared to the same period in the prior year driven by additional marketing investments aimed at driving sales volumes and general increase in costs due to inflation.
Administrative expenses were ZW$214,6 million 42% higher than the period in prior year, driven by additional marketing investments aimed at driving sales volumes and general increase in costs due to the rapid devaluation of the Zimbabwean dollar in the period under review .
“In a challenging operating environment, volumes from the sale of cigarettes declined due to shrinking disposable incomes amidst increasing inflation and currency devaluation in comparison with the same period last year,” said Manatsa.
The period also saw operating profit declining by ZW$1,4 billion in the period under review was ZW$678,6 million, compared to a net profit of ZW$1,4 billion versus the same period in the prior year, representing a 149% decrease. – Newzim