BAT Zim beats earnings forecast

Feb 28 2013 15:36
Malcom Sharara, Fin24’s correspondent in Zimbabwe
Harare - British American Tobacco (BAT) Zimbabwe, a subsidiary of BAT International Holdings (UK) Limited, reported forecast-beating earnings for the year ended December 31 2012.

Basic earnings per share for the group was up 153.5% to 71 US cents, up from 28c in the prior year while the dividend jumped 82.6% to 42c, up from 23c a year ago.

Turnover for the period also jumped to US$51.8m up from $39.8m last year, with operating margins improving significantly to 33.9% from 18.38% prior year.

Volumes for the group however declined by 11% during the period. The drop in sales volumes was experienced across all local brands, and largely attributed to the increase in excise duty and retail selling price of cigarettes at the end of 2011.

The company said the slowdown in gross domestic product (GDP) growth is also a contributory factor. Zimbabwe’s GDP, at 9.4% in 2011, slowed down to 4% in 2012.

The company’s share price has also been rallying, having gained 101.39% to close at 725.01c in Thursday’s trading session.

Last year BAT shareholders unanimously approved its indigenisation proposal that resulted in locals owning 51% of the company.

The company was however back in the news with allegations of espionage levelled against the tobacco cigarette manufacturer by its Zimbabwean competitors.

President Robert Mugabe even accused BAT of using criminal means to kill its major competitor, locally-owned Savanna Tobacco, in Zimbabawe.
The company however strongly denied any involvement in industrial espionage or illegal activity linked to other local tobacco manufacturers.

 - Fin24

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bat  |  zimbabwe  |  tobacco  |  economy



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