BATU half year net profits drop to sh3.8b

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British American Tobacco Uganda (BATU) posted a profit after tax of sh3.8b for the six months ended June 30, 2025, down from sh4.5b in the same period last year.

Gross revenue fell 15% to sh33.5b in the review period. The company board said no interim dividend would be paid to shareholders for the review period.

The drop in revenue and profit was largely attributed to lower sales volumes, which the company linked to the rising presence of illicit cigarettes in the Ugandan market.

According to third-party research cited by BATU, the share of tax evaded cigarettes in the market rose to 34% at the end of 2024, up from 25% the previous year.

“Illicit trade remains the biggest threat to the sustainability of our business in Uganda,” the company said in a statement.

The company warned that illicit trade not only hurts legitimate industry revenues but also costs the government an estimated sh32b in lost tax revenue each year.

Excise duty and VAT payments dropped 15% to sh15.1b, reflecting the decline in volumes. Net revenue came in at sh18.4b, down from sh21.8b a year earlier.

Operating costs also fell by 16% to sh12.8b, partly due to what the company described as prudent cost management.

Finance costs rose to sh300m from just sh8m last year, driven by foreign exchange losses following the appreciation of the Ugandan shilling against the US dollar. Pre-tax profit dropped 18% to sh5.4b, while income tax expense decreased to sh1.6b.