BAT remains upbeat despite challenging 1Q performance
KUALA LUMPUR: British American Tobacco (M) Bhd remains upbeat on its outlook, backed by a resilient combustibles business and Dunhill's lead in the premium segment.
'We are confident that our financial performance in 2025 will strengthen as the group continues to focus on growing Dunhill's leadership in Malaysia as well as driving quality and sustainable growth in the premium, aspirational premium and value-for-money segments,' managing director Nedal Salem said in a statement.
In the first quarter ended March 31 (1Q25), BAT posted a lower net profit of RM23.3mil, or earnings per share of 8.20 against RM29.9mil, or 10.50 sen in the year-ago quarter.
Revenue for the quarter fell to RM321.9mil versus RM411.9mil a year ago.
The board of directors has declared a first interim ordinary dividend of 7.5 sen per ordinary share, amounting to RM21.5mil, payable on July 3 to shareholders.
Salem said BAT's financial performance for 1Q25 reflects the challenging operating landscape in Malaysia, citing the ongoing impact of the tobacco black market and weaker demand following the earlier start of Ramadhan.
'Despite the challenging operating landscape, the group's flagship brand, Dunhill, continued to demonstrate strength, recording a 0.7 percentage point growth in market share compared to the same period last year. This reflects Dunhill's strength as the No. 1 brand in the country with 60 years of presence in Malaysia,' he said,
Commenting on the Control of Smoking Products for Public Health Act 2024 and its related regulations (Act 852) that have taken effect with measures to be implemented in phases in 2025, Salem said, 'We continue to view Act 852 as a crucial step in the right direction to regulate the tobacco and vapour industry in Malaysia. While 2025 will be a transitional year given the multiple measures that will take effect throughout the year, we are fully prepared to navigate the phased implementation of Act 852.'
He added that while the industry remains affected by the tobacco black market, the group is encouraged by stronger enforcement efforts, particularly by the Royal Malaysian Customs Department, which have helped bring the black market incidence down from 56.4% in January 2024 to 54.8% in January 2025.
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