KUALA LUMPUR: British American Tobacco (Malaysia) Bhd's (BAT Malaysia) net profit increased 23.43 per cent to RM78.68 million in the third quarter (Q3) ended September 30, 2021, from RM63.74 million a year ago, boosted by an increase in market share.
Revenue in the same quarter decreased marginally by 2.31 per cent to RM613.02 million from RM627.52 million recorded last year.
BAT Malaysia managing director Nedal Salem said this marked the company's third consecutive quarter of financial growth.
"This growth momentum is a result of an increase in the share of market and volume which improved our revenue and profit from operations," he said in a statement today.
However, Salem said consumer affordability remains under pressure due to the high tobacco tax rate, with 57.9 per cent of the market dominated by the black market.
"To effectively manage the issue, the government must enhance enforcement, not increase excise, and address the price gap between legal and black market products," he said in a statement today.
For the nine months, the company's net profit increased 26.19 per cent to RM213.41 million from RM169.12 million a year earlier, while revenue grew 7.26 per cent to RM1.78 billion from RM1.66 billion.
This was primarily due to the company's seven per cent growth in domestic volume, which outperformed the total legal industry recovery rate of six per cent.
The volume growth led to revenue growth of seven per cent compared with the same period last year.
"Consistent with the volume growth trajectory, the company's total market share stood at 52.5 per cent, registering an increase of 1.0ppt (percentage point) compared with the same period last year," it added.
BAT Malaysia portfolio grew in all segments, with Dunhill growing by 2.1ppt in the premium segment, Peter Stuyvesant and Pall Mall by 0.8ppt in the aspirational premium segment and Rothmans and KYO by 2.5ppt in the value-for-money (VFM) segment.
"We remain steadfast in our efforts to sustain the recovery of the legal cigarette market and advocate for the introduction of a regulatory framework for reduced-risk products such as nicotine vapour," Salem added.
BAT Malaysia has declared a third interim dividend of 26 sen per share, amounting to RM74 million, to be paid out on November 25 to shareholders.
This equates to a 94 per cent payout on its Q3 earnings per share and a dividend yield of seven per cent.