British American Tobacco (BAT Malaysia) net profit for the first quarter ended 31 March, 2022 fell 17 per cent to RM 52.29 million (USD 11.29 million) from RM 63.11 million (USD 14.39 Million) in the previous year's corresponding quarter, reports The Edge Markets.
Revenue for the quarter declined 8 per cent to RM 521.56 million from RM 566.55 million, which it blamed on the Omicron variant having affected purchasing habits, persistently high illicit cigarette incidence and other seasonal factors.
However, the group managed to reduce its operating expenses by 14 per cent or RM 8 million year-on-year, following its cost rationalisation efforts, which mitigated the impact of lower sales volume to its profit from operations, which was marginally lower at RM 82 million compared with RM 87 million a year ago, the report said.
During the quarter, Dunhill's share of the premium segment grew by 0.7 percentage points to 61.9 per cent, while its value-for-money brands Rothmans and KYO grew to 35 per cent share of the segment.
"BAT Malaysia is maintaining the growth trajectory of its strategic brands within its premium and value-for-money segments. This is in tandem with the company's aim to deliver combustible value growth," said BAT Malaysia managing director Nedal Salem in a statement.
"Concurrently, BAT Malaysia is also poised to benefit further from its future-fit route-to-market hybrid sales model and digital transformation initiatives, all of which will play a role in creating a simpler and faster organisation," he added. Nedal said the tobacco black market continues to weigh down on the performance and operations of the legal industry and cause the government to lose about RM 5 billion in uncollected tax revenue annually.