By Alois Vinga
BRITISH American Tobacco PLC says it has suffered a 9% sales decline owing to critical shortages of the new Zimbabwe Gold (ZiG) currency in the market.
Launched on April 5 2024 as the country’s lasting solution to the local currency challenges, the Reserve Bank of Zimbabwe (RBZ) presented the local unit as gold backed before it took a dip within a few weeks of its inception.
During its initial phases, the currency went for almost a month in limited supplies prompting many companies to endure reduced sales volumes.
Presenting the group’s performance for the period ended June 30, 2024, BAT’s chairman, Lovemore Manatsa bemoaned reduced sales volumes during the period.
“Sales volumes declined by 9% due to the change of trading currency and shortage of the new currency.
“Revenue decreased by 38% from ZWG400 million when compared the same period prior year. The decrease in revenue was due to a decline in sales volumes. This resulted in a gross profit decline of 41% compared to the same period in the prior year,” he said.
The cigarette manufacturer also bemoaned the complex; uncertain economic macroeconomic turbulence fuelled by monetary instability and substantial exchange rate distortions adversely impacting business activity.
“Despite these challenges, BAT Zimbabwe is optimistic about the future and continues to review its business model to ensure long-term sustainability and value creation for its stakeholders. The Company demonstrated resilience in the face of continued macro-economic headwinds,” said Manatsa.
For the period under review, excise duty, corporate tax, value added tax, customs duties, pay as you earn and withholding tax amounted to ZWG112 million for the period ended 30 June 2024.
In view of the financial performance recorded during the period under review, the Board of Directors has not declared an interim dividend for the period ended June 30, 2024.
“We are committed to sustainability delivering shareholder value. We remain confident in the resilience of our underlying business strategy, which is anchored on our diversity, excellence in execution, world class talent, strong brands and effective business partnerships,” added Manatsa.
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