KUALA LUMPUR: British American Tobacco (Malaysia) Bhd's (BAT) net profit fell 6.7 per cent to RM262.52 million for the financial year ended December 31, 2022 (FY22) from RM284.86 million last year.
The company's net profit also fell 13.6 per cent to RM61.73 million in the fourth quarter (Q4) of FY22 from RM71.46 million a year ago.
To deliver on the strategy to simplify the portfolio, the company saw a planned decline in overall market share of 0.8 per cent compared with last year, primarily due to the delisting of Kent and Pall Mall brands.
The group recorded an increase in 0.5 per cent in gross profit margin compared to the previous year. Gross profit for 2022 stood at RM678 million compared to RM675 million in 2021.
"Annual volume fell slightly by two per cent compared with 2021, where a one-off benefit in volume was observed during the Route-to-market model transition," it said.
In line with the downtrading trend observed in the market, BAT Malaysia's value-for-money (VFM) brands, KYO and Rothmans, captured an additional one per cent market share.
Despite the contraction of the industry's overall share of the premium segment by one per cent during the year, BAT Malaysia's Dunhill brand secured growth of 1.1 per cent share in this segment, indicating the premium brand's strong foothold.
For FY22, the board of directors has declared a fourth interim dividend of 21 sen per ordinary share, amounting to RM60 million, payable on March 7, 2023, to shareholders.
For the fourth quarter (Q4) ended December 31, 2022, BAT Malaysia's net profit fell to RM61.73 million from RM71.46 million, while its revenue decreased to RM770.66 million from RM861.89 million.
BAT Malaysia managing director Nedal Salem said that despite the economic headwinds, the company are optimistic about the prospects for 2023.
Salem said that with the launch of its tobacco-heated product, glo, which hit the market in February 2023, BAT Malaysia can now offer a choice with reduced risk potential to adult Malaysian smokers.
"We are also encouraged by the new government's priority to implement economic reforms to stimulate growth and strengthen the foundations of the country.
"In the November 2022 Budget tabling, various measures were announced to reduce the levels of the black tobacco market, including introducing a single-entry point policy in the northern region, enhanced controls at landing points including private jetties and a special rewards scheme for enforcement to stop smuggling activities.
"We strongly encourage the new government to maintain these measures in the February 2023 Budget tabling while also exploring science and evidence-based regulations to legalise the vapour market," he said.