Cost of business eats into BATU’s profitability
What you need to know:
The decline in profit, BATU said, was due to an increase in cost of operations, which more than offset the rise in revenue.
Despite a 6 percent growth in its revenue which translates to Shs99.5b BATUs profit after tax dipped to Shs9.8b for the full year ended December 2022 down from Shs10.2b registered in the same period last year.
The decline, BATU said, was due to an increase in cost of operations, which more than offset the rise in revenue.
During the period, cost of operations grew by 15 percent (Shs34.5b from Shs30b) but BATU saw its profit position increase, supporting a dividend recommendation of Shs209 per share.
BATU also indicated that trade in illicit cigarettes was one of its biggest challenges, urging government to act.
Mr Mathu Kiunjuri, the BATU managing director, said whereas the business had remained resilient, the escalating trade in illicit tobacco products had become worryingly higher, growing to 29 percent up from 24 percent in 2021.
Dr Elly Karuhanga, the BATU chairman, said because the company had undertaken a number of interventions, its fundamentals returned a strong financial position.