british american tobacco malaysia - BAT Malaysia expects another tough year ahead



Petaling Jaya, 22 February 2011 – British American Tobacco (Malaysia) Berhad (BAT Malaysia) announced that the Group’s profit after tax for 2010 was 2.1% lower at RM731 million compared to RM747 million in 2009. This was attributed to a volume decline by 2.1% due primarily to the surge in illicit cigarettes trade to record new levels and unfavourable pack size mix after the withdrawal of packs less than 20 sticks, partially offset by higher net pricing.

Amidst the tough operational landscape, the Group grew market share for the first time in 10 years in 2010 by 0.4 percentage points to register full year average of 60.0% market share. This growth is due to strong performance of DUNHILL in premium segment and the successful launch of Peter Stuyvesant International in strengthening its value for money portfolio.

Arising from the Group’s financial performance, the Board of Directors of BAT Malaysia has declared a third interim dividend of 63.00 sen per share, tax exempt under the single tier tax system in respect of the financial year ending 31st December 2010.

Commenting on the Group’s performance, William Toh, Managing Director of BAT Malaysia said, “There is no doubt that 2010 has been one of the toughest year for the tobacco industry. Illicit cigarettes trade registered an average rate of 38.2% , an all time high and represented an increase of 0.7 percentage points from 2009 indicating that more than 9 billion sticks of illicit cigarettes were sold last year.  There was another high excise increase as Government announced a 16% excise increase in October 2010 that led to a double digit retail price for a premium pack of cigarettes at RM10.00. The industry also saw continuous tightening of tobacco regulatory environment with ban of cigarette packs with less than 20 sticks and the introduction of minimum price.”

Toh added, “This staggering 38.2% is not fully reflective of the current incidence of illicit cigarettes trade as it has yet to factor in the impact of the high excise led price increase in October 2010. What we do know is that industry volumes amongst CMTM members recorded a significant drop in the 4th quarter of 2010 by 16.8% compared to the same period last year. Looking at this, there is every possibility that the incidence of illicit cigarettes trade could be higher, piling more pressure on the legal industry. We believe that the strong presence of very cheap illicit cigarettes in this country is not only a threat to the legal industry but it seriously undermines the Government’s tax collection and health agenda to reduce smoking incidence in Malaysia.”

BAT Malaysia hopes that the Government will take serious measures to curb the growth of illicit cigarettes with more strong crackdown efforts by relevant authorities on illicit cigarettes.

Toh concluded that the Group is cautious on the outlook of growth for 2011 as the legal industry will continue to be greatly impacted by high incidence illicit cigarettes trade, down trading pressures and a shrinking legal market size. The Group however remains committed to delivering long term shareholder value by enhancing the strength of its brand portfolio and through its strategic imperatives on Growth, Productivity, Responsibility and Winning Organisation.

For more information on British American Tobacco Malaysia’s financial results, please visit www.batmalaysia.com

About British American Tobacco (Malaysia) Berhad

British American Tobacco (Malaysia) Berhad (British American Tobacco Malaysia) emerged on 3rd November 1999 from the merger of Rothmans of Pall Mall (Malaysia) Berhad and Malaysian Tobacco Company Berhad. These two long established tobacco companies brought with the merger, experience and an unrivalled portfolio of highly successful international brands to create the largest tobacco company in the country.

British American Tobacco Malaysia manufactures and markets high quality tobacco products designed to meet diverse consumer preferences. Brand portfolio includes well-established international names like Dunhill, Kent and Pall Mall. British American Tobacco Malaysia has about 1,600 employees who are involved in the full spectrum of the tobacco industry, from leaf buying and processing to manufacturing, marketing and distribution.       

British American Tobacco Malaysia is part of the British American Tobacco group, which is the world’s most international tobacco group and the second largest stock market listed tobacco group by global market share.

For more information, please contact British American Tobacco Malaysia:

Mr Chin Tuck Weng, Corporate Affairs Manager at 03-7941 7318 or Chin_Tuck_Weng@bat.com
Mr Daniel Lui, Corporate Communications Manager at 03-7491 7311 or Daniel_Lui@bat.com


Page last updated: 22/02/2011 11:54:56 GMT