British-American Tobacco (BAT) profit after tax improved by 18 percent to Ksh6.5 billion in the year ended December 31, 2021.
The profits were attributed to the increase in net revenue, effective cost management and offset by higher corporation tax in line with rate changes.
The growth in profitability is reflected in higher earnings per share (+18 percent).
During the year, a property valuation exercise was done in line with the Company’s accounting policy, resulting in a gain of Ksh1.2 billion in other comprehensive income.
Contribution to Government revenues Taxes in the form of Excise Duty, VAT, Pay As You Earn (PAYE) and Corporation Tax increased by Ksh2 billion (13 percent) to Ksh18 billion as a result of the inflationary increase in Excise Duty rates, as well as the VAT and Corporation Tax rate changes effected in January 2021.
The Board of Directors has proposed a final dividend in respect of the year ended December 31, 2021, of Ksh50 per share to be recommended for approval by shareholders at the Annual General Meeting to be held on May 24, 2022.
The final dividend, when added to the interim dividend already paid, gives a total dividend of Ksh53.50 per share. The dividend, which is subject to withholding tax, will be paid on or about May 24, 2022 to the shareholders on the register at the close of business on April 22, 2022.
“The easing of COVID-19 restrictions during the year created a more favorable trading environment compared to the prior year. This coupled with continued investments behind our brands, support to our trade partners and excellence in execution by our people resulted in the stability of our domestic sales,” the company said.
However, the continued prevalence of illicit trade in tax-evaded cigarettes. estimated at 22 percent, remains a significant challenge and continues to adversely impact legitimate industry revenues and deny Government more than an estimated Ksh4 billion per annum in taxes.
Financial Performance Gross revenue increased by three percent to Ksh40 billion. This was primarily driven by pricing benefits in the domestic market.
This revenue growth was marginally reduced by lower export sales, attributable to slower economic recovery in some of our key markets.
The growth in gross revenue was offset by a Ksh1.1 billion (eight percent) increase in Excise Duty and Value Added Tax (VAT), following inflationary increases in Excise Duty rates and VAT rate changes.
Consequently, net revenue Increased marginally by 0.4 percent to Ksh25.4 billion.