BAT toughening it out in Zim

Harare - British American Tobacco (BAT) [JSE:BTI] is toughening it out in a challenging operating environment in Zimbabwe, latest financial results have shown.
 
According to the full year to December 31, 2014 results released by the company last Friday, revenue remained static at $44.6m in line with the previous year.
 
Volumes for the period under review was up 4% while net profit for the period amounted to $13.45m, up from $3.77m prior year.
 
Management said the results were impressive considering that they were achieved in an environment in which formal employment and consumer spending continues to fall.
 
“In 2014, ongoing liquidity challenges were worsened by appreciation of the United States dollar by around 10% against the South African rand, the currency of Zimbabwe’s main trading partner in the region,” added the company.
 
“The results demonstrate strength and resilience in the underlying businesses,” said MD Lovemore Manatsa.
 
The cigarette business in Zimbabwe is also been hampered by a continued increase in sin tax.
 
In an effort to boost its waning revenues the Zimbabwean government has been increasing excise duty on cigarettes resulting in negative impact on BAT’s volumes.

“Cigarette volumes continue to decline mainly due to the impact of successive excise driven prices increases in 2011, 2012 and in December 2014," said BAT.