British American tobacco Zimbabwe Ltd reported a US$4,6 million profit in the six months to June from US$3,6 million in the same period a year ago despite an increase in selling and marketing costs.
The company’s total revenue for the half year ending june 30 2017 declined 0,5% in the same period last year, albeit marginally offset by the extension of the low-priced brand, Ascot. Total sales volume grew by 0,2% spurred by the growth of the low-priced segment brand, Ascot, resulting from increased trading by price-sensitive consumers. In a statement of results, BAT chairperson Lovemore Manatsa (pictured above) said sales volumes for Dunhill, the company’s premium brand, declined moderately compared to the same period last year. Selling and marketing costs over the half year increased by 12,5% to US$0,2 million in the same period last year due to a change in the company’s route to market structure and increased investment behind the company’s brands.
Administrative expenses declined 34,1% at US$1,9 million in the same period last year largely driven by non recurring cots associated with a staff rationalisation exercise carried out in 2016.
The company’s earnings per share consequently increased by 22% to US$0,22 from US$0,18 attainable same period last year.
Cash generated from operations increased by 23% to US$9,9 million compared to US$8 million same period last year driven by increased profitability, improved collections, delays in payments to foreign suppliers and a decrease on stock holding.
During the period under review, other income, net of their expenses decreased by 48% to US$0,3 million compared to the same period last year driven by a once off income from duties refunds received in n2016 from the Zimbabwe Revenue Authority,(Zimra)
In line with Zimra Manatsa noted that the group’s contribution to the authority in taxes including Excise, corporate tax, VAT, PAYE and withholding tax declined by 12% to US$14,1 million from US$16 million during the period under review.
“The reduction in tax contribution was mainly driven by once off PAYE cists which arose from the once of staff realignment exercise carried out in 21016,” he said.
Total assets during the period stood at US$35 million compared to US$31,7 million in the same period last year while total liabilities stood at US$23,7 million up from US$19,2 million same period last year.