British American Tobacco (BAT) Bangladesh announced a 150 per cent interim cash dividend despite a 2.2 per cent year-on-year decline in profit to Tk 3.97 billion in the third quarter through September this year.
It earned a lower profit due to higher finance expenses and lower leaf exports.
The cigarette manufacturer's earnings per share (EPS) stood at Tk 7.35 for July-September this year, down from Tk 7.52 for the same quarter the year before, according to its unaudited financial statements.
It managed to offset some of the costs by increasing sale prices but failed to maintain profit growth amid rising inflation and higher finance expenses, said an official of the company.
At present, BAT Bangladesh's total number of shares is 540 million. That means the tobacco manufacturer will disburse Tk 8.10 billion in dividend to its shareholders. It will make the additional payment from retained earnings.
The tobacco company's net sales grew 9.6 per cent year-on-year to Tk 20.51 billion during the July-September quarter, riding on higher domestic sales.
The cost of sales, which includes all associated costs to produce cigarettes, was Tk 10.41 billion in July-September, which was 50.76 per cent of total sales during the quarter, up from 49.78 per cent in the same period last year.
Its net finance expenses also jumped 240 per cent year-on-year to Tk 238 million in the third quarter due to higher borrowing costs after interest rate hikes.
The company's nine months' profit slid 2.6 per cent year-on-year for the same reasons, while net sales increased 2.23 per cent in the nine months, compared to the same period a year earlier.
Domestic sales rose 1.23 per cent year-on-year to Tk 65.75 billion, while leaf exports plunged 30 per cent to Tk 2.08 billion in the nine months through September this year, compared to the corresponding period last year.
BAT has secured a steady business growth in domestic sales as factors, such as
high inflation and price hikes, could not sway the buying habits of smokers, market
analysts say.
The company in its financial statement did not say why leaf exports had fallen significantly during the quarter.
BAT invested more than Tk 12 billion in phases in the past four years to expand its production capacity.
It markets various brands -- Benson & Hedges, John Player Gold Leaf, Capstan, Star, Royals, Lucky Strike, Derby, Pilot, Flag and Hollywood.
BAT has factories located in Dhaka and Savar, a green leaf threshing plant in Kushtia, and a green leaf re-drying plant in Manikganj.
Annual performance
BAT Bangladesh declared a 100 per cent cash dividend for 2023, the lowest in more than a decade, though the 2023 profit was as much as in the previous year.
Cash dividends disbursed for 2023 amounted to about 30 percent of the annual profit of Tk 17.88 billion.
Meanwhile, the stock surged 8.75 per cent to close at Tk 376.4 per share on the Dhaka Stock Exchange on Wednesday.
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