BAT volumes flat

HARARE - Cigarette manufacturer British American Tobacco (BAT) says its trading is flat, with volumes one percent lower in the five months to May 2014 compared to prior comparable period.

Its managing director Lovemore Manatsa said he expects improved volumes in the second half of the year, adding that the current performance is normal during the first half of the year.

“Normally, the first half is trekking on target but the second half is ahead of target. In terms of trading… so far we are flat compared to last year but trekking in line with our targets,” he told businessdaily on the sidelines of BAT’s annual general meeting yesterday.

“Regional performances are already picking up including the eastern part of the country… Masvingo, Mashonaland West and East have also followed suit,” he said.

He, however, said Harare remains the core market.

Manatsa added that the company’s flagship brand, Madison, did not perform well during the period. “Madison is trekking and thats where most of our volumes come from, however we have plans to jazz up the brands,” he said.

Manatsa said despite the unsatisfactory performance by Madison, Dunhill and Everest brands were ahead of target.

In February, he said the firm targeted to produce 1,45 billion cigarettes — way below its peak of 2,3 billion sticks in 1999 — this year on the back of surging demand and a stable economic environment.

Meanwhile, BAT shareholders approved a dividend of $0,18 per share, after posting an after tax profit of $3,8 million in the year to December 2013.

Manatsa said trading conditions may remain stiff due to the depressed economy.

United Kingdom-based BAT International Holdings Limited holds a 42,98 percent in the local unit while Old Mutual Life Assurance holds 11,97 percent.

Employees own a combined 20,76 percent while the rest is held mainly by pension funds. Manatsa also said the company would continue to invest in Zimbabwe and has no plans to exit the country.

The group’s revenue in the year to December 2013 declined by 14 percent to $44,6 million from 51,2 million recorded in prior year.

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