BAT Uganda downbeat
British American Tobacco Uganda (BATU) warned its second-half profit would suffer from higher taxes and a weak shilling after a drop in cigarette smuggling helped it more than double profit in the first six months of the year.
British American Tobacco Uganda (BATU) warned its second-half profit would suffer from higher taxes and a weak shilling after a drop in cigarette smuggling helped it more than double profit in the first six months of the year.
"The second half of the year will be impacted by the recent increase in cigarette excise taxes, the weakening of the Uganda shilling and the impact of drought in some of our leaf-growing areas," the company said in a statement published in the Daily Monitor.
The biggest tobacco producer and exporter in east Africa's third largest economy, BATU said it earned a profit of 7.7 billion shillings from January to June, up from 3.4 billion shillings in the first six months of 2010, according to results published in the local media on Monday.
"Cigarette sales volumes grew by 29 percent ... reflecting a strong market performance during the first half of 2011," the company said.
"The increase in volumes was also impacted by lower illicit trade levels as a result of government anti-illicit enforcement activities and recovery in sales performance of our key brands," said BATU, a unit of British American Tobacco .
The Uganda shilling has been trading at record lows for much of this year, compounded by high inflation and dollar demand from the oil sector. The Horn of Africa region is also suffering its worst drought in decades, putting about 12 million people at risk of starvation in Kenya, Ethiopia, Somalia and Djibouti, and also affecting east Africa.
The company, which said it had paid taxes worth 31 billion shillings in the first half of 2011, proposed a dividend payout of 141 shillings per share, totaling to 6.9 billion shillings.
BATU is the east African nation's biggest grower of tobacco, producing about half of the country's total output.
Reuters
"The second half of the year will be impacted by the recent increase in cigarette excise taxes, the weakening of the Uganda shilling and the impact of drought in some of our leaf-growing areas," the company said in a statement published in the Daily Monitor.
The biggest tobacco producer and exporter in east Africa's third largest economy, BATU said it earned a profit of 7.7 billion shillings from January to June, up from 3.4 billion shillings in the first six months of 2010, according to results published in the local media on Monday.
"Cigarette sales volumes grew by 29 percent ... reflecting a strong market performance during the first half of 2011," the company said.
"The increase in volumes was also impacted by lower illicit trade levels as a result of government anti-illicit enforcement activities and recovery in sales performance of our key brands," said BATU, a unit of British American Tobacco .
The Uganda shilling has been trading at record lows for much of this year, compounded by high inflation and dollar demand from the oil sector. The Horn of Africa region is also suffering its worst drought in decades, putting about 12 million people at risk of starvation in Kenya, Ethiopia, Somalia and Djibouti, and also affecting east Africa.
The company, which said it had paid taxes worth 31 billion shillings in the first half of 2011, proposed a dividend payout of 141 shillings per share, totaling to 6.9 billion shillings.
BATU is the east African nation's biggest grower of tobacco, producing about half of the country's total output.
Reuters