KUALA LUMPUR: British American Tobacco (M) Bhd suffered a horrid last quarter ended 31, as continued slump in sales volume and impairment charges resulted in a sharp decline in earnings.
The group, in a filing with Bursa Malaysia on Tuesday, said it remained “very concerned” with the high incidence of illegal cigarette trade.
“The outlook for 2018 will be very much dependent on the recovery of the legal market,” it said.
Net profit in the fourth quarter slumped 74% to RM47.7mil from RM219.3mil made a year ago, as revenue fell 11.5% to RM962.6mil.
BAT entered the “value for money” segment in October through the introduction of Rothmans, as the company seeks to counter slowing sales of key brand Dunhill.
“In the fourth quarter of 2017, Rothmans stood at 1.8% market share and was becoming the fastest growing brand within the VFM segment, exiting 2017 at 2.8% market share,” it said.
BAT said its “aspirational premium” brands Peter Stuyvesant and Pall Mall also showed strong sales.
“Despite market share growth in the fourth quarter of 2017 versus the preceding quarter for the group, the legal market has further contracted due to the growth in illegal cigarette incidence,” it said.
During the fourth quarter of 2017, the group also made a provision for impairment of prepaid excise duties of RM21mil, as well as RM1.4mil in restructuring cost.
For the full year, BAT’s net profit stood at RM479.7mil, or 172.5 sen a share.
The company said it will pay a fourth interim dividiend of 43 sen to bring its year-to-date payout to 169 sen a share.
The stock was last traded at RM32.88, down 17.8% year-to-date.