HomeBusiness DigestVideo: BAT Zimbabwe earnings up 15%, raises concerns over excise duty leakages

Video: BAT Zimbabwe earnings up 15%, raises concerns over excise duty leakages

BAT Zimbabwe profit for the full year to December was up 15% to US$15,4 million compared to prior comparative year driven by growth in revenue and cost cuts, the company said amid concerns that government could have lost US$18 million in excise duty last year through smuggled cigarettes into the market.

Watch video of the presentation of the results

Incoming managing director Clara Mlambo told an analyst briefing that while the ensuing year will be challenging for consumer-facing firms, the group has plans to grow volumes in 2016 after they plunged 10% during the year under review on weakening demand.

Despite this decline, Dunhill volume growth of 12% versus 2014 off a niche consumer base, boosted by “Switch” variant, the company said.

Mlambo was appointed MD early this month after Lovemore Manatsa resigned last month.

Revenue grew by 2% driven by marginal gains from pricing net of the impact of the excise increase in November 2014, inspite of sales volume drop.

“What we have seen is what we call suspiciously priced products in the market particularly in the last quarter. We have seen an increase on those products. It’s a conversation we are having with the authorities that we need to manage the situation,” Mlambo said.

[su_document url=”http://www.theindependent.co.zw/wp-content/uploads/2016/02/Analysts-Briefing-_Business-Update-Presentation.pdf”]

“Excise was raised from US$15 to US$20 per 1000 sticks. When you products sold at US$0,50 you can’t understand how excise can be paid such products are paying excise duty when we factor in costs etc .Just looking at the fourth quarter government lost about US$2,3 million in excise, looking at the full year about the amount can be US$18 million.”

New finance director, Lucas Francisco who takes over from Peter Doona who resigned last December said selling and Marketing Costs reduced by 7%due to distribution efficiencies and cost containment initiatives.-Bernard Mpofu

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