British American Tobacco reported a £6.2 billion (US$7.7 billion) hit from a long-running lawsuit in Canada on Thursday and warned of “significant” headwinds in Bangladesh and Australia in 2025 after annual revenue missed forecasts.
Tobacco companies have faced various legal challenges related to the health consequences of their products and continue to come under pressure from anti-tobacco activism and stricter regulation around the globe.
BAT, the maker of Lucky Strike and Dunhill cigarettes, and some of its rivals were set to pay C$32.5 billion (R420 billion) to settle a long-running case in Canada, but some parties, including Philip Morris International’s Canadian affiliate, have since objected to the proposal.
In Australia and Bangladesh, meanwhile, BAT said tax increases had hurt its tobacco business.
Chief executive, Tadeu Marroco, said these represented “significant regulatory and fiscal headwinds” that would hurt its performance this year, but their impact would recede into 2026.
BAT’s investments would also start to pay off by the end of the year, helping bring the company back to its targeted revenue growth of between 3 percent and 5 percent by 2026, he said.
The company expects 2025 revenue to grow about 1 percent at constant currency rates in 2025, and performance is projected to be weighted towards the second half of the year.
Analysts said that while BAT’s 2024 results were in line with expectations, its guidance for 2025 was below forecasts.
Investors at least “finally have a line of sight” in terms of the impact of the Canadian settlement and how much profit the division can contribute once it is resolved, Barclays analyst Gaurav Jain said in a note.
The case has hung over BAT and other companies in Canada for a decade.
However, Jain added, objections from some parties to the settlement could see the case drag on.
BAT’s full-year revenue stood at £25.87 billion and adjusted profit stood at 362.5 pence per share, compared with expectations of £26.11 billion and 362.2 pence, respectively, according to a company-compiled poll.
Shares of the group had slumped by 7 percent on the JSE in morning trade on Thursday, though they have still risen by about a quarter on a one-year basis. – news24.com
