CIGARETTE maker BAT Kenya posted a net profit of Sh4.25 billion in 2014 boosted by higher export revenue and growth in sales locally.
East Africa director Chris Burrell said on Friday that the company’s closure of the Democratic Republic of Congo plant and relocating production to Kenya, led to a 26 per cent growth in export volumes.
“2014 was quite challenging but i think we have good results nonetheless,” said Burrell during an investor briefing held in Nairobi.
Gross revenue increased by seven per cent for the period ending December 31, 2014 to Sh34.12 billion compared to Sh31.9 billion in 2013.
Burrell said that insecurity issues that caused a downturn in tourism and consequently a negative ripple effect in other sectors was among some of the issues that caused a difficult business operating environment for the company last year.
BAT reported a growth in sales volumes of all its cigarette brands except for the Safari brand which is targetted at the low income smokers.
Burrell attributed the decline to the firm’s net improvement on its portofolio mix which has seen “Kenyan consumers migrate from one price point to another,” as users upgraded to other products manufactured by BAT.
“The uptrading phenomenon is a benefit to the company. It helps in premiumisation of our portfolio,” he said.
BAT recorded a 43 per cent rise in sales volume of its premium Dunhill brand.
The firm which has over the years been a victim of sin tax increments in the national budget paid six per cent more tax last year than it did in 2013, despite its pretax profit being 11 per cent more. BAT’s total tax payout which included excise, VAT, PAYE and corporate totalled Sh15.4 billion in 2014.
BAT has declared a dividend payout of Sh42.50 per share for the year, to be paid on May 5.
