BATU promotes Magoola to CEO, registers better half-year profit

KAMPALA  | BUSINESS  

British American Tobacco Uganda (BATU) has promoted Ugandan, Kirunda Magoola to the Managing Director and Executive Board Director effective immediately, following the re-deployment of Mathu Kiunjuri. 

 Hitherto, Magoola had been BATU's corporate and regulatory affairs manager. He takes over the reins as the economy and the company battle the Covid-19 pandemic.  

 In a statement, the company secretary Nicolas Ecimu noted that the change in management took effect on Saturday August 1, 2020. 

 "He (Magoola) is an experienced marketing and communications professional with over 15 years' experience within the consumer goods and utility industries. He is skilled in business planning and management, risk management as well as regulatory and policy management," Ecimu said. 

 Magoola holds a Master of Science degree in accounting and finance from Makerere University Business School and a Bachelor of Commerce degree from Bhopal University in India. 

 Ecimu said that Kiunjuri, who served at the helm of BATU since October 2017 had steered the company to significant growth and delivered sustained value to shareholders. 

 Last week, BATU's released it's half-year financial results for the year ended June 2020 indicating a 2% climb in profits after tax to sh9.9b despite COVID-19 effects to the economy.    

 Half-year profit came on the back of a decline in excise duty and value-added tax to sh39b from sh48b after a significant drop in topline revenues to sh76b from sh86b in June 2019. 

  "For the first half of 2020, gross revenue reduced by 12% to sh76b, mainly due to the impact of the COVID-19 pandemic on the consumer purse," Kiunjuri said. "With rising unemployment and a significant increase in the cost of various basic consumer goods, the pandemic has left many consumers more cash-stretched than ever." 

He noted that BATU had closed some retail outlets which led to constrained consumer access to the firm's products. Despite these challenges, he noted that BATU's impressive performance was down to prudent cost management measures undertaken to mitigate the decline in revenue.   

However, Kiunjuri said that the menace of illicit trade is entrenching itself now more than ever, on the back of heightened consumer affordability challenges. 

He explained that despite the enhanced border controls put in place to mitigate the spread of COVID-19, BATU's trade teams continue to report an increased presence of illegal tax evaded cigarettes in the Ugandan market, primarily tax-evaded cigarettes from Kenya.   

Kiunjuri pointed out that at the end of 2019, about 44% of illicit cigarettes sold in Uganda had been smuggled across the Kenyan border. In addition to eating into the firm's market, illicit trade in cigarettes denies the government in excess of sh30b every year, he said.   

He pointed out that immediate action is required to re-double enforcement of anti-illicit trade regulations and applauded Uganda Revenue Authority's (URA's) Digital Tracking Solution (DTS) as one of the solutions to curb the illicit cigarette problem. 

"One way of improving enforcement could be through enhanced action includes cooperation between Uganda and Kenya officials in stemming the flow of illicit cigarettes into Uganda, which requires identification of the source of these illegal products and their supply routes," Kiunjuri said.

"We also reiterate our call to the Government to ratify the World Health Organisation (WHO's) Protocol to Eliminate Illicit Trade in Tobacco Products (ITP)," he added.  

Dr. Elly Karuhanga, the BATU chairman said that the company has secured over 30,000 business partners and tobacco farmers and has initiated a new strategy to deliver higher growth.