PETALING JAYA: British American Tobacco (Malaysia) Bhd’s net profit for the second quarter ended June 30, 2026 (Q2’26) decreased 79.1% to RM10.64 million from RM50.95 million a year earlier, as revenue fell amid a challenging operating environment and higher operating costs.
Revenue for the quarter declined 17.5% to RM515.29 million from RM624.75 million previously.
For the first six months of the year (H1’26), the tobacco group posted a net loss of RM24.51 million compared with a net profit of RM74.22 million in the corresponding period last year, while revenue dropped 28.6% to RM675.59 million from RM946.74 million.
In a filing with Bursa Malaysia, BAT Malaysia said revenue for the first half was affected by a 5.6% decline in legal combustible segment volume, driven by a two-percentage-point increase in illicit cigarette incidence following fiscal and regulatory changes, including the retail display ban and excise duty hike. Combined with macroeconomic pricing headwinds, this resulted in a 27.8% decline in total volume. Operating expenses also rose 48.8% due to transition-related costs and business restructuring activities.
The group said restructuring costs amounted to RM18.12 million in the second quarter and RM28.80 million for the six-month period as part of efforts to improve operational efficiency and establish a more sustainable cost structure.
Managing director Nedal Salem said the company will continue focusing on building brand awareness, improving cost discipline and operational efficiency as it stabilises performance under its new Route-to-Market (RTM) model.
“We will continue to focus on building brand awareness and penetration, cost discipline and operational efficiency as we stabilise the Group’s performance and advance towards gradual recovery with the new RTM model, while continuing to drive sustainable value for the business,” he said.
BAT Malaysia noted that the latest May 2026 Illicit Cigarettes Study showed tobacco black market incidence eased slightly to 56.2% of total industry volume from 56.7% in the preceding quarter, reflecting the impact of continued enforcement efforts. However, the level remains significantly above the 54.5% recorded at end-2025.
Looking ahead, the group expects Malaysia’s economy to remain broadly stable for the rest of 2026 but said persistent cost-of-living pressures and the high incidence of illicit cigarettes will continue to weigh on the business. It will focus on disciplined cost management, improving route-to-market efficiency and strengthening its product portfolio to support long-term shareholder value.
The board declared a second interim dividend of five sen per ordinary share, payable on Sept 28, 2026.
