According to Market Screener's report on July 24th, British American Tobacco Malaysia announced its financial performance for the Q2 quarter ending June 30, 2024.
The company's revenue for the second quarter was 640 million Malaysian Ringgit (137 million US dollars), a decrease of 5.6% from the same period last year. This quarter's operating profit was 56 million Ringgit (11.99 million US dollars), down from 73 million Ringgit (15.63 million US dollars) a year ago, as a result of continued investment in the e-cigarette brand Vuse.
The cigarette brand Dunhill continues to solidify its market leadership position in Malaysia, with its market share increasing by 0.4% from the previous quarter to reach 30.9%. Despite the ongoing impact of consumers shifting to e-cigarettes and traditional tobacco products, its performance remains strong. Compared to the previous quarter, the market share of its high-end brand decreased by 0.2% to 6.0%, while the market share of its value-for-money brand remained unchanged at 12.7%.
In the review of the past six months, BAT Malaysia's overall sales have decreased compared to the first half of 2023, due to a sluggish market in the first quarter of 2024. However, there was a rebound in sales in the second quarter of 2024, indicating a gradual recovery. Additionally, due to investments in Vuse e-cigarette and an increase in operating expenses, the company's operating profit decreased by 22.3% to 102 million ringgit (21.84 million USD).
BAT Malaysia's board of directors announced a second interim dividend of 12 sen per ordinary share, totaling RM 34.2 million (USD 7.32 million), to be paid to shareholders on August 22, 2024.
Nedal Salem, the Managing Director of BAT Malaysia, stated that...
Our financial performance met expectations as we continued to invest in developing Vuse in Malaysia. Our goal is to build a better tomorrow, and the group firmly believes that its strategic investments will contribute to achieving sustainable growth in Malaysia.
The tobacco black market continues to impact the industry, with its occurrence rate still at 54.8%. While the group applauds law enforcement agencies' efforts to crack down on the illicit tobacco trade, they believe the government should consider reviewing its tax policies in order to align with the strengthened enforcement measures expected in the upcoming 2025 budget.
The group believes that the "2024 Public Health Tobacco Control Law" is the right direction for the industry. Any regulations introduced must be reasonable and evidence-based to ensure effective implementation and achieve the intended goals, without promoting the growth of the tobacco or e-cigarette black market.
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