KUALA LUMPUR: British American Tobacco (M) Bhd (BAT Malaysia) posted a lower net profit of RM59.53 million for the third quarter (Q3) ended September 30, 2023 (FY23) from RM75.25 million posted in the same quarter last year.
Revenue stood lower at RM606.79 million for the quarter compared to RM666.90 million posted in Q3 FY22 due to volume weakness experienced by the company.
BAT Malaysia saw a marginal dip in its overall market share of 0.5 per cent, while volume declined by 9.4 per cent.
Although the industry's premium segment declined due to consumer downtrading, BAT Malaysia's Dunhill brand remained strong, commanding above 60 per cent share of the premium segment.
The company's aspirational premium (AP) brand, Peter Stuyvesant, claimed an additional 1.1 per cent of the segment
share during this period.
BAt Malaysia also launched Luckies within the value-for-month (VFM) segment during Q3 of this year to offer more affordable options to consumers.
Further, the company undertook a modest price increase in its premium and AP
segments during Q3 FY23, prompted by rising inflation and increased cost of business.
This necessary step marks the first time BAT Malaysia has adjusted its prices since 2018.
Managing director Nedal Salem said Q3 financial results were within expectations given the current economic climate, in which increased inflationary pressures have stretched consumers' disposable income.
"During Q3 FY23, BAT Malaysia launched Vuse Go (1,500 puffs) in limited outlets and garnered positive results.
"Following this, we launched Vuse Go (3,000 puffs) in October 2023 with a wider
range of flavours. We look forward to expanding Vuse Go to more locations nationwide in the near future," he said in a statement.
BAT Malaysia is also encouraged by the government's consistent efforts to tackle the tobacco black market, which remains high.
"We appreciate that the government acknowledges the severity of the tobacco black market and continues to implement measures to tackle this issue, which causes Malaysia to lose RM5 billion
annually in uncollected taxes.
"We believe that the recent measures announced during the tabling
of the 2024 Budget, when implemented effectively, will further play a role in tackling the high levels of the tobacco black market.
"BAT Malaysia is also supportive of the government's decision to maintain the current excise level, not further fuel the tobacco black market.
"We strongly urge the government to adopt policies that are evidence-based and data-driven to ensure that Malaysian vape consumers have access to reduced-risk products that are compliant with quality and safety standards," Nedal said.