BRITISH American Tobacco (M) Bhd (BAT Malaysia), the only listed tobacco player in Bursa Malaysia today, has credited law enforcement authorities whose intensified enforcement actions have resulted in the decline of tobacco black market incidences from 56.4% in January 2024 to 54.3% in November 2024.
This came on the back of the group’s FY2024 revenue inched up 0.2% year-on-year (yoy) to RM2.315 bil from RM2.311 bil amid a 3.4% rise in volume from the prior financial year which was largely driven by higher demand in 4Q 2024.
Despite the group actively optimising marketing cost, profit from operations for FY2024 nevertheless declined by 0.8% mainly due to lower margin from vapour products and marginal contraction within the legal combustible industry.
“We are encouraged by the intensified enforcement actions from the Royal Malaysian Customs Department in addressing the tobacco black market that has helped to reduce the incidence of tobacco black market in the country,” commented BAT Malaysia’s managing director Nedal Salem.
“While the incidence of tobacco black market has been on a declining trend, we encourage the government to continue to focus its attention and resources to address the issue in 2025.”
Touching on the Control of Smoking Products for Public Health Act 2024 and its related regulations that have taken effect with measures to be implemented in phases in 2025, Nedal urged the Health Ministry (MOH) “to continue to have open dialogues with the industry during this transition period”.
“This is to ensure the industry is clear on the guidelines and requirements in order to comply with the new regulations as well as ensuring there is no disruption to the market,” he stressed.
Deliberating on financial performance, Nedal said the numbers were within expectations as the combustible business remains resilient despite the changing market trends.
“We are optimistic of the group’s prospects for 2025 backed by Dunhill, the No.1 brand in Malaysia, with 60 years presence as the top cigarette brand in the country,” he projected.
“Looking ahead, BAT Malaysia will focus on growing Dunhill in the premium segment along with other brands within our portfolio in the aspirational premium and value-for-money segments.”
He added: “This is in tandem with the Group’s strategic aim to deliver combustible value growth as part of our multicategory business.”
The BAT Malaysia board has declared a fourth interim dividend of 15 sen/share amounting to RM42.8 mil payable on March 6 shareholders which brings its FY2024 payout to 59 sen (FY2023: 63 sen).
At 11.19am, BAT Malaysia was up 3 sen or 0.4% to RM7.32 with 187,600 shares traded, thus valuing the company at RM2.09 bil. – Feb 7, 2025
