jump to search

Illicit cigarette trade continues to impact legal volumes


Petaling Jaya, 19 November 2009 – British American Tobacco (Malaysia) Berhad (BAT Malaysia) registered 13.2% lower profit before tax for the quarter under review at RM234.5 million compared to preceding quarter at RM270.1 million. This is due to the 6.1% contraction in legal volumes compared to the previous quarter as a result of continued pressure from high level of illicit cigarettes. However, the full impact of volume contraction was partially offset by higher net pricing, improved sales mix and productivity savings from various cost management initiatives implemented.

William Toh, Managing Director of BAT Malaysia said, “The operating landscape continues to be extremely challenging as the level of illicit cigarettes continued with its upward trend compounded by current economic crisis that is affecting consumer’s spending power.”

According to the latest Illicit Cigarette Survey conducted by the Confederation of Malaysian Tobacco Manufacturers for the period between June and August 2009, the level of illicit cigarettes has gained further ground, from 36.7% to a new record high of 38.7%.

“In view of current high level of illicit cigarettes, the latest increase of 1 sen per stick in excise on cigarettes which took effect 1st October 2009 will hopefully assist the industry to mitigate some of the loss of legal volumes to the burgeoning illicit trade. This approach coupled with strong enforcement initiatives, implementation of stricter penalties and creating more awareness on the dangers of this menace will help to bring down the current high level of illicit cigarettes,” said Toh.

“On the outlook for the rest of the year, in light of the significant contraction in legal volumes, the Group does not expect to maintain earnings in line with the previous year. However, we are still committed to delivering long term shareholder value through our strategic imperatives on Growth, Productivity, Responsibility and Winning Organisation,” Toh added.

Arising from the financial performance of the quarter under review, the Board of Directors has declared a second interim dividend of 61.00 sen per share, tax exempt under the single tier tax system in respect of the financial year ending 31st December 2009.

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 2,000 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
Ms Annabel Ng, Corporate Communications Manager at 03-7491 7281 or Annabel_Ng@bat.com