BRITISH American Tobacco (M) Bhd (BAT Malaysia), the only listed cigarette manufacturer on Bursa Malaysia today, is hopeful that the Budget 2023 which will be re-tabled on Feb 24 will maintain measures to reduce the level of tobacco black market in the country, including the introduction of a single-entry point policy in the northern region.

Its managing director Nedal Salem further stressed the need to follow through the various measures laid out during the Budget 2023 tabling in November last year such as enhancing controls at landing points including private jetties and a special rewards scheme for enforcement to stop smuggling activities.

“We strongly encourage the new Government to maintain these measures in the February 2023 Budget tabling while also exploring science and evidence-based regulations to legalise the vapour market,” he pointed out in a media release to announce the company’s 4Q FY2022 financial performance.

For the said financial period, BAT Malaysia posted a 13.6% reduction in net earnings to RM61.73 mil (4Q FY2021: RM71.45 mil) while its revenue dwindled 10.6% to RM770.66 mil (4Q FY2021: RM861.88 mil).

For the entire FY2022, BAT Malaysia’s net earnings was 7.8% lower at RM262.52 mil (FY2021: RM284.86 mil) while its revenue shrank 1.5% to RM2.6 bil (FY2021: RM2.64 bil).

Portfolio-wise, the group saw a decline in its overall market share of 0.8% compared with the same period last year primarily due to the delisting of Kent and Pall Mall brands. Annual volume fell slightly by 2% compared with 2021 where a one-off benefit in volume was observed during the route-to-market model transition.

In line with the down-trading trend observed in the market, the group’s value-for-money (VFM) brands – KYO and Rothmans – captured an additional 1% share of market.

Despite the contraction of the industry’s overall share of premium segment by 1% during the year, BAT Malaysia said its Dunhill brand secured a growth of 1.1% share in this segment, indicating the premium brand’s strong foothold.

For FY2022, its board of directors has declared a fourth interim dividend of 21 sen/share (4Q FY2021: 27 sen) amounting to RM60 mil which will be payable on March 7 (total dividend payout for FY2022 is 88 sen compared to 98 sen in FY2021).

“Despite the economic headwinds we are optimistic for the company’s prospects for 2023,” projected Nedal on the group’s outlook.

“With the launch of our tobacco heated product, glo that hit the market in February 2023, we are now able to offer an alternative choice with reduced risk potential to adult Malaysian smokers. This is in line with our commitment towards building A Better Tomorrow,” he justified.

Elsewhere, Nedal said BAT Malaysia is also encouraged by the new government’s priority to implement economic reforms to stimulate growth and strengthen the foundations of the country.

“This in part can be achieved through reducing leakages stemming from the tobacco black market and creating a new revenue stream by implementing taxation for reduced risk products such as vape, which remains unregulated,” he added.

At 9.15m, BAT Malaysia was down 42 sen or 3.28% to RM12.38 with 50,300 shares traded, thus valuing the company at RM3.53 bil. – Feb 9, 2023

The post BAT Malaysia: Authorities must proactively curtail illicit tobacco trade first appeared on Focus Malaysia.