BAT Malaysia released its third-quarter earnings report, which showed a 3.3% year-on-year increase in total sales volume, leading to a 0.5% increase in revenue to MYR 609.95 million ($130 million) and a 14% increase in net profit to MYR 67.91 million ($15.5 million), according to an October 31 report by Focus Malaysia.
The growth was primarily driven by an optimized product mix and higher e-cigarette sales, partially offset by higher capital expenditure. While lower margins on e-cigarette products resulted in a 1.3% decrease in gross margin, last year's substantial investment in the launch of Vuse in Malaysia contributed to a 28.9% decrease in operating expenses year-on-year. As a result, operating profit increased by 17.1% YoY to MYR 99.5 million (USD 22.72 million).
Managing Director Nedal Salem expressed optimism about the third quarter financial performance, noting that Vuse, the world's leading e-cigarette brand, has driven the Group's growth in Malaysia.
"Our investments are showing promising results as they have strengthened our product mix and increased sales volumes. The Group remains optimistic and expects further performance improvement thanks to its multi-category portfolio, with a focus on driving the growth of Vuse," Salem said.
He added that it is too early to assess the full impact of Malaysia's newly enacted Public Health (Tobacco Control) Act 2024 (Act 852), which will roll out measures in 2024 and 2025. Salem encouraged the government to engage with the industry during the transition period to ensure that the new regulations do not disrupt market stability.
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