BAT volumes in 25pc growth
BAT Zimbabwe says an improved trading environment in 2021 resulted in a 25 percent volume growth, driven by firm consumer demand for its products and growth in exports.
Mr Lovemore Manatsa, the group’s chairman, said in the group’s 2021 annual report, that the year under review was characterised by a decline in the inflation rate, stability of the exchange rate, and increased economic and social activity following the relaxation of the Covid-19 lockdown restrictions.
“The group recorded a positive volume performance for the year under review mainly attributable to increased consumer demand, increased export of cut-rag tobacco, consistent product supply and the easing of the Covid-19 lockdown restrictions,” he said.
Mr Manatsa said the volume growth of 25 percent, compared to the same period the prior year, also benefited from excellence in execution by staff and improved access to market.
“Export volumes of leaf and cut-rag tobacco were up by 74 percent in the period under review compared to prior year due to increased demand from our export markets,” Mr Manatsa said.
During the year under review, BAT recorded an increase in revenue of 42 percent, which amounted to $1,4 billion compared to the previous year, driven by volume growth, price reviews as well as revenue generated from the export of cut-rag tobacco and leaf.
Mr Manatsa said the two income generating streams resulted in a gross profit increase of $1,3 billion compared to the same period in 2020.
He said selling and marketing costs increased by $172 million, which was 39 percent higher in comparison to the same period in prior year.
“This was mainly driven by trade activations which we carried out during the launch of our brand migration from Everest Menthol to Lucky Strike.
“Other marketing investments and strategic initiatives which were implemented by the group to respond to and satisfy consumer preferences also added to the increase in selling and marketing costs,” he said.
During the period under review, administrative expenses were flat compared to the previous year, and other losses decreased by $539 million due to the stabilisation of the local currency. “As a result of all the above, operating profit increased by $1,8 billion compared to an operating profit of $412 million recorded in the prior year,” he said. Mr Manatsa said on the Blocked Funds Registration Subsequent to December 31 2019, the RBZ registered blocked funds amounting to US$15,7 million in respect of outstanding dividends, in line with the blocked funds guidelines stipulated in the Exchange Control Directive RU28 dated February 21 2019 and the Exchange Control Circular 8 of 24 July 2019.
In line with the provisions of the February 2019 Monetary Policy Statement on the settlement arrangements for these blocked funds, RBZ is now finalising the appropriate instrument(s) to facilitate settlement of the registered blocked funds.-The Herald
