Petaling Jaya, 10 April 2012 – British American Tobacco (Malaysia) Berhad (BAT Malaysia) held its 51st Annual General Meeting at the Hilton, Petaling Jaya today. The Group’s volumes in 2011 took a 1.3% dip due to decreased consumption and the still high levels of illegal cigarette trade which currently stand at a staggering 36.1% 1.
For the full year ended 2011, BAT Malaysia registered a 4.1% increase in revenue to RM4,127 million when compared to 2010. This increase is however attributed to higher excise driven pricing. The Group's profit before tax was 'broadly flat' at RM956 million compared to RM959 million in the year before. Notably this was after absorbing the impact of the loss of 14's pack size margins (half year impact) together with taking a number of operational charges in relation to the Company’s distribution model and merchandising accounting policy. Eliminating the year-on-year impact of non-recurring costs profit before tax for 2011 would have been approximately RM13 million higher.
The Group registered a 1.6% decline in profit after tax at RM720 million compared to the year before, principally due to a lower effective tax rate in the prior year due to a tax credit.
Amidst the challenging landscape, the Group achieved a second consecutive year of market share growth, registering a full year market share of 61.1% up by 1.3 percentage points when compared to 2010. Arising from this performance, the shareholders have today agreed to the recommended total net dividend of 276 sen per share for the financial year ended 31 December 2011 (including 30 sen per share special dividend), representing a payout of 98% of earnings attributable to shareholders (110% of earnings including the special dividend).
Commenting on the Group's performance, William Toh, Managing Director of BAT Malaysia said, "In spite of a good performance in 2011, illegal cigarette trading continues to be an issue of major concern to the Group, the industry and the Government. Illegal cigarettes are still at a very high level of 36.1% of the total market which represents an estimated 9 billion sticks of unregulated and tax-evaded illegal cigarettes in the country."
"We are very encouraged however by the active and increased enforcement efforts of the relevant government agencies, notably the Royal Malaysian Customs and the Malaysia Marine Enforcement Agency, and also appreciative of the Government’s decision to not increase excise tax as announced in the tabling of the Federal Budget 2012. The Group firmly believes that such commitment and acknowledgement of the issue by the Government is a step in the right direction which has led to an annualised reduction of illegal cigarettes trade by 0.2 percentage points from 36.3% in 2010. The decrease is even more pronounced, with a 2.5 percentage points reduction, when comparing the interim survey figures at the beginning of 2011 to the figures at the end of the same year without an increase in excise and with heightened enforcement," said Toh.
On the Group's outlook for 2012, Toh added that the Company is well positioned to sustain its cigarette market share growth momentum though the industry anticipates further challenges in the operating landscape in the continued battle against illegal cigarette trade, the illegal sale of certain local brands at way below the mandated minimum price, and increased operating costs pressure.
"We are also pleased to announce that 2012 marks BAT Malaysia's 100 years anniversary in Malaysia, and we look forward to continuing our illustrious legacy and to grow from strength to strength as we continue to conduct our business in a responsible and sustainable manner," Toh concluded.
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. Its brand portfolio includes well-established international names like Dunhill, Kent, Pall Mall and Peter Stuyvesant. British American Tobacco Malaysia has about 1,200 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, Senior Corporate Affairs Manager at 03-7941 7318 or Chin_Tuck_Weng@bat.com
Mr Paul Choo, Corporate Affairs Manager at 03-7491 7331 or Paul_Choo@bat.com
1 Annualised figures from Wave 1 (March – May 2011), Wave 2 (June – August 2011) and Wave 3 (October – December 2011) of Illicit Cigarette Survey conducted by Confederation of Malaysian Tobacco Manufacturers (CMTM).