KUALA LUMPUR: British American Tobacco (Malaysia) Bhd (BAT Malaysia) saw its net profit fall 25.6 per cent year-on-year (YoY) to RM30 million in the first quarter ended Mar 31, 2024 (Q1 2024) versus RM40.32 million in Q1 2023 mainly due to higher operating expenses with ongoing investments in the vapour business.
In a statement, the company said the tobacco black market was persistently high with an incidence of 55.9 per cent in Q1 2024.
Additionally, the nicotine industry saw consumers shifting to the growing vapour category.
The company's revenue climbed 5.6 per cent to RM411.97 million in the quarter under review against RM390.23 million in the same period last year.
It added the company's market share declined by 0.3 per cent compared to the preceding quarter contributed by intensified competition and downtrading trends within the combustible space.
As a result, BAT's premium and aspirational premium brands recorded market share declines of 0.3 per cent and 0.2 per cent respectively, whereas, value-for-money brands captured 0.2 per cent increase in market share mainly due to positive traction from Luckies.
The board of directors declared a first interim ordinary dividend of 10 sen per ordinary share amounting to RM28.6 million, payable on June 20 to shareholders. "Our financial performance for Q1 2024 is reflective of an environment impacted by a growing tobacco black market, and a notable consumer shift from traditional tobacco to vapour. "The group remains optimistic that its financial performance will be strengthened in 2024 as the Malaysian economy improves, backed by resilient domestic consumer spending and a recovery in exports. "The group is also confident that its strategic pivot towards offering reduced-risk alternatives, via Vuse, will fuel its growth trajectory and drive its transition into a multicategory business," said BAT Malaysia managing director Nedal Salem.