BAT to pay Ushs 20.3 billion to shareholders

By Silvia Nyambura

British American Tobacco (BAT) will on the 21st of June 2016 pay out a total of Ushs 20.3 billion in dividends to its shareholders for the year ended 31st December 2015. This follows a solid performance by the company which saw the Board of Directors recommend a final dividend of Ushs 413 per share.

Speaking at the company’s 16th Annual General Meeting held today at the Sheraton Kampala Hotel, BAT Managing Director Dadson Mwaura said, “Total revenues were 26% lower as a result of lower leaf export volumes following the discontinuation of our leaf business in 2014. Cigarette revenues however increased by 6% from Ushs 64 billion in 2014 to Ushs 70 billion in 2015 mainly due to price increases on some of the company’s major brands. This performance is what informed the decision to pay out this dividend.”

He explained BAT recorded a 3% growth in 2015 compared to 2014 and paid out Ushs 71 billion in taxes.

Dr. Elly Karuhanga the company’s Board Chairman said this performance was impressive given the difficult economic conditions including a depreciating shilling and high inflation.

“This led to exchange losses in the company’s foreign transactions. Cigarette sales volumes were also impacted by the 29% increase in excise taxes in July 2015. Illicit trade of cigarettes which is currently at 20% remains a key concern in addressing loss of legal industry volumes as well as stemming loss of government revenue in Uganda. Despite these challenges the business managed to reduce operating costs and grow revenues,” he explained.

Regarding the new industry legislation under the Tobacco Control Act 2015, Mwaura said,”We do welcome the regulation of the sector. We however maintain that it should be fair and balanced to be able to deliver the public health objectives while taking into account the legal rights of the industry and those who derive their livelihoods from the sector. The law comes to effect in 2017 and we are aligning our business to prepare for the impact of this bill.”

BAT shares remain the best priced on the Uganda Securities Exchange (USE) at the moment trading at an average of Ushs 30,000 per share. This has been a positive growth compared to Ushs 8,500 at the end of 2014.