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British American Tobacco Malaysia registered growth in 2008 but anticipates heightened challenges in 2009 as market volumes continue to decline


Petaling Jaya, 20 April 2009 – British American Tobacco (Malaysia) Berhad held its 48th Annual General Meeting at the Hilton, Petaling Jaya today. For the full year ended 2008, British American Tobacco (Malaysia) Berhad has registered a revenue growth of 8% as compared to 2007, posting a profit after tax of RM812 million despite a 1.5% decline in the overall industry volumes.

The shareholders have today agreed to the recommended final dividend of 76.00 sen net per share for the financial year ended 31 December 2008. This brings the total dividend for the 2008 financial year to 265.00 sen per share, a 3% increase over 2007’s net dividend payment.

The Group informed its shareholders that it anticipates greater challenges in the tobacco industry pressured by the on going high level of illicit tobacco trade, tighter tobacco regulations and greater price sensitivity amongst consumers due to the economic uncertainty.

Jack Bowles, Managing Director of British American Tobacco Malaysia said, “We had witnessed a significant increase in cigarette excise of 20% in 2008. This has resulted in a large tax-led price increase which we believe has further fuelled the growth of illicit trade. Based on the recent 2008 statistics, illicit trade has reached an average of 25.6% of total cigarette sales which is the highest reading in the last decade. This, coupled with the start of the economic downturn that has impacted spending power, has further led to the continued decline of legal tobacco volumes. ”

“We are aware that illicit trade in cigarettes has to be tackled from different angles and there is no one quick fix for curbing it. However, we believe that one of the steps to be considered is to increase excise on cigarettes moderately and gradually as steep excise increases provide the unwanted stimulus spurring the lucrative illicit trade. It further presents illegal traders and criminals with the opportunity to make significant profits at low risk. BAT Malaysia is not against excise increase if the Government thinks it is a means to further its health initiative of reducing consumption but as said earlier we hope that the excise increases will be done in a moderate and gradual manner, so as not to just move the consumption from the legal to the illegal industry,” Bowles said.

Bowles further added, “We are certainly very appreciative of the significant efforts taken by enforcement agencies like the Royal Malaysian Customs to stop the illegal cigarette trade and we also believe that if not for these efforts, the illicit trade problem could have been much worse.  We hope to continue with our concerted joint efforts by the industry and the relevant enforcement agencies to further curb it.”

With respect to further tobacco control regulations, we hope that such regulations will be balanced and effectively enforced. As a responsible company, BAT Malaysia will comply with all regulations that are passed by the Government.

Moving forward, we are committed to continuing to build a sustainable business by leveraging on our strong fundamentals and continuing to focus our strategies on generating Growth, enhancing Productivity, and strengthening our Winning Organisation whilst running our business Responsibly. Our resolute commitment to deliver superior shareholder value remains a key focus for the year ahead.

About British American Tobacco Malaysia

British American Tobacco (Malaysia) Berhad (BAT 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.

BAT 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. BAT Malaysia has about 2,000 employees who are involved in the full spectrum of the tobacco industry, from leaf buying and processing to manufacturing, marketing and distribution.       

BAT 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: