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BAT records an increase in volumes

Cigarettes manufacturer, British American Tobacco (BAT) recorded a 10 percent increase in volumes during the first quarter of 2020 compared to the same period last year.

That was despite the trading environment has continued to be challenging, characterised by the lack of foreign currency for imports as well as the widening gap between the interbank rates and the parallel rates.

Annual inflation was 676.4% in March 2020.

In a special trading update for the first quarter, BAT Company secretary, Pauline Kadembo, attributed the increase in volumes to their new marketing tools.

“The company recorded a 10% increase in volumes, compared to the same period last year, driven by various efficiencies from the new trade marketing tools that are being used by the company,” said Kadembo.

“Turnover, on a historical cost basis, increased by 703% compared to the same period last year driven by price increases which were taken to manage the inflationary pressures faced by the company. The company also commenced cut rag exports in March 2020 to assist in foreign currency generation.”

She, however, said BAT was yet to feel the impact of COVID-19-induced lockdown.

“The company envisages that COVID-19 will have an impact on the business in the half year financial reporting,” she said.

“The Company has, however, put in place measures to ensure that it recovers from the impact of this pandemic. The company implemented all necessary precautionary measures in terms of the guidelines issued by the Ministry of Health and Child Care and the World Health Organisation to ensure that its employees are adequately protected against the COVID-19 pandemic.”

She saidan improvement in the power supply during the lockdown enabled less usage of generators to power the business operations.

“The Company is continuously looking at ways to mitigate these challenges to ensure the long-term sustainability of the business,” she added.

Kadembo said the economic environment was expected to remain challenging adding the impact of COVID-19 would be evident in the second quarter.

“The business expects a drop in volumes in the second quarter due to trading for a few days in April 2020 and reduced operations in May 2020,” said Kadembo.

“The tobacco selling season has opened and we will continue to monitor the price movements and how these will impact our business.”

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