British American Tobacco Uganda (Batu) has registered an increase in profit of Shs1.9b for the year ended December 2019.
According to full year results for the year ended December 2019, Batu also proposed a dividend payout of Shs320 per share pending an approval by the annual general meeting due for May 21.
Batu, which was listed on the Uganda Securities Exchange in 2000 at price per share of Shs1,000 has since seen a rapid increase in its stock price to Shs30,000.
Total operations, according to the results, increased marginally due to inflationary pressures and portfolio transformation expenses.
Consequently, profit after tax increased by 14 per cent to Shs15.7b, which represented an increase of about Shs1.9b. In 2018, Batu registered profit after tax of Shs13.7b.
Gross revenue for the year ended December 2019, increased by 7 per cent to Shs164.3b driven by benefits of a revamped portfolio and distribution efficiency.
In 2015, Batu restructured its operations in Uganda reducing its work force by almost a third.
The company, which also transferred its manufacturing wing to Kenya, maintained a skeleton structure in Kampala mainly composed of sales, marketing and distribution as it sought to cut down cost of operation as well as improving efficiency.
During the year ended December 2019, Batu profits from operations increased by 13 to Shs22.4b as a result of growth in net revenues.
The company also reported a revaluation gain of Shs1.4b of its properties after an independent valuation.
Batu, results show, contributed Shs96b in tax, which represents a 6 per cent growth compared to last year.
Effect of illicit trade
However, despite the growth in the company’s performance, the increased incidences of illicit trade in cigarettes remains a key challenge not only for Batu but for the country as a whole.
Illicit trade in cigarettes, according Batu, denied government close to Shs30b in annual revenue.
“We will continue to work closely with government agencies to tackle illicit trade in cigarette,” the financial report reads in part.