British American Tobacco Bangladesh Company (BATBC) is set to invest Tk 115.6 million in rooftop solar panels and related infrastructure at its Savar factory.
In a stock exchange filing on Thursday, the multinational cigarette manufacturer said its board has approved the capital investment decision at a meeting held on Wednesday.
"The investment will be funded from internal sources and bank financing based on the cash flow of the company," said the company.
The investment in solar panel system with 1.5 megawatt capacity would reduce carbon emission by 944 tonnes per year, according to the company.
The solar panel system, which has a lifespan of 20 years, is expected to ensure annual electricity cost savings of Tk 51 million, according to the company.
However, following the news, the company's stock price dropped 0.92 per cent to close at Tk 397 on Thursday.
The cigarette maker has factories located in Dhaka and Savar, a green leaf threshing plant in Kushtia, and a green leaf re-drying plant in Manikganj.
The tobacco leader in Bangladesh has invested more than Tk 12 billion in phases in the past four years to enhance production capacity to meet the growing demand.
BAT Bangladesh markets products of various cigarette brands, namely Benson & Hedges, John Player Gold Leaf, Capstan, Star, Royals, Lucky Strike, Derby, Pilot, Flag, and Hollywood.
FINANCIAL PERFORMANCE
The cigarette manufacturer's half yearly profit dropped slightly year-on-year to Tk 9.25 billion during January-June this year, 2.6 per cent down from Tk 9.50 billion in the same period of the previous year, owing to higher production costs and increased finance expenses.
Also, the company's half-yearly net sales dropped by 0.70 per cent to Tk 48.86 billion, as against Tk 49.20 billion in the same period of the previous year.
Lower leaf exports, higher production costs and increased finance expenses have negatively impacted the profit growth, said a company official, requesting not to be named.
Although the tobacco maker's domestic sales remain almost the same to Tk 47.03 billion, its leaf exports plunged 86 per cent year-on-year to Tk 276.4 million in January-June this year.
The company's costs of sales also increased amid higher input costs along with sharp devaluation of local currency against the US dollar.
BAT Bangladesh declared a 100 per cent cash dividend for 2023, the lowest in over a decade, despite maintaining almost the same net profit as in the previous year.
Its profit stood at Tk 17.88 billion in 2023, slightly up from Tk 17.87 billion in 2022. However, the cash dividend declared represents only 30 per cent of the total annual profit.
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