Theresa Mhazo and Latifa Mapfumo
BAT ZIMBABWE says volumes from the sale of cigarettes declined by 6 percent for the half year ending June 30, 2022, due to shrinking disposable incomes.
According to chairman, Lovemore Manatsa, demand for cigarettes was constrained by low disposable incomes, as
salaries and wages are being eroded by inflation.
However, Manatsa said export volumes of rag tobacco were up by 74 percent in the period under review, compared to the prior year due to increased demand for tobacco leaf from export markets.
The Group chairman, in a statement accompanying financials, highlighted that the revenue increased 71 percent to $6,9 billion from $4 billion, compared to the same period in 2021.
“A gross profit increase of $2,8 billion or 160 percent compared to the same period in 2021 was driven by price increases effected during the period”, said Manatsa.
Selling and marketing costs increased by $314,3 million, 42 percent compared to the same period in the prior year, driven by additional marketing investments aimed at driving sales volumes and the general increase in cost due to inflation.
Administrative expenses were $214,6 million, 42 percent higher than the same period in the prior year, driven by a general increase in cost due to inflation.
Losses increased by $580,9 million, reflecting 548 percent due to the rapid devaluation of the Zimbabwean dollar in the period under review.
Therefore, Manatsa revealed that operating profit declined by $1,4 billion or 90 percent versus the same period in the prior year.
This resulted in a net loss to shareholders for the period under review of $678,6 million, compared to a net profit of $1,4 billion in the same period in the prior year, representing a 149 percent decrease.
“The Group’s earnings per share decreased from $99,3, or 149 percent to a negative $32,9 generated in the same period in 2021,” said Manatsa.
However, cash generated from operations was a positive $2 billion or a 24 percent increase from prior year due to increased inflows as a result of price reviews effected during the period under review.
Meanwhile, BAT said its contribution to the Zimbabwe Revenue Authority (ZIMRA) in taxes was $3,5 billion for the half-year ended June 30, 2022