British American Tobacco (BAT) sales volumes declined by 20% in the six months to 30 June 2019 compared to the same period last year.
Group chairman Lovemore Manatsa in an Unaudited Financial Results for the Half Year Ended 30 June 2019 said the decline was driven by shrinking consumer disposable incomes.
“The premium Brand, Dunhill, recorded a decline of 87% compared to the same period in the prior year driven by the company’s inability to import Dunhill as duties are required in foreign currency,” Manatsa said.
“The Value for Money Brands, Madison and Everest, declined by 21% and the Low Value for Money Brand, Ascot also declined by 2%.”
Despite the drop in sales volumes, BAT registered an increase in profits as comparing the same period last year.
The company’s operating profit increased by ZWL$0,9 million (9%) compared to the same period last year, to close at ZWL$11,3 million.
Gross profit increased to ZWL$8.9 million which 61% up compared to the same period.
The gross profit increase was driven up by revenue which grew by 48% to ZWL$9,6 million.
“Increased inflation resulted in selling and marketing costs increasing by ZWL$ 1.4 million (54%) to ZWL$ 3.9 million compared to the same period last year. The main cost drivers were distribution costs,” Manatsa said.
“Administrative expenses increased by ZWL$ 2.6 million (117%) driven by once-off restructuring costs and the economic inflationary pressures.”