BAT sales volumes slump 8% on depressed consumer spend, COVID 19

Author Name
Respect Gwenzi
Stock Market 5 months ago

Harare – Zimbabwe Stock Exchange Listed cigarettes producer, British American Tobacco (BAT) has recorded an 8% decrease in sales volumes for the nine months ended 30 September 2020 mainly due to reduced consumer spending and the adverse impact of COVID 19.

BAT produces some of Zimbabwe’s best-known cigarette products which include Madison, Everest, Dunhill, Newbury, Kingsgate and Ascot.

In March 2020 the Zimbabwean government introduced a COVID 19 induced lockdown that forced business to scale down on operations which adversely affected sales and profitability for almost all businesses including independent retailers responsible for the distribution of BAT products and this is reflected in the results.

Furthermore, the macro economic state in the country also had its toll on businesses with hyperinflation reaching a record high of 837.53% in July 2020 while the exchange kept on rapidly fluctuating which reduced consumer spending as salaries were not matching the inflationary rate.

In the recent trading update posted by the company, BAT reports that of all the products in the company portfolio, the premium brand Dunhill only recorded a significant increase in sales volumes, gaining by 962% against the same period in 2019 while the Aspirational Premium brands, Newbury and Kingsgate volumes declined by 33% compared to same period in prior year.

The reason for the gain in Dunhill sales is that, production of the cigarette brand had been ceased in the prior year and it only returned to the market during the period under review.

Madison and Everest which are in the company’s Value for money segment recorded a 5% decline in sales volume while the low value for money categorized product, Ascot saw a 43% decline in sales.

Despite the slump in volumes however, net revenue came in 31% higher than the comparable period in inflation adjusted terms driven by price increases taken during the period as well as revenue generated from the export of cut-rag tobacco.

Going forward the company intends to take advantage of the foreign currency auction system introduced by the central bank to harness foreign currency required for importing raw materials and are also ready to take advantage of the exchange rate stability that has been brought about by the same system to improve on the recently posted performance.

Equity Axis News.

Stock Market ● 1 day ago
Runaway Inflation Drags GetBucks Opex To New Heights

ZSE-listed microfinancer GetBucks posted a ZWL 45 million loss for the year ended December 31st 2020 following a hyperinflationary financial year. The Covid-19 pandemic compounded the Bank's losses in the period, with operational expenditure ballooning to ZWL 160 million at the end of 2020, up from ZWL 115 million in the 2019 financial calendar. Inflation on the other hand closed the year at a rea...

Stock Market ● 3 months ago
Stocks falter in early trades of the year

ZSE Daily Comment 06.01.21 *Performance Charts incl (ZSE indices, ZSE Value Traded, Interbank) The ZSE ended the tumultuous 2020 at record highs, only to plunge on the first session of the year on Monday. The local bourse has largely been sailing in tandem with global markets. At the close of business today, global stocks had collectively slipped amid a fresh wave of the novel, Corona virus, whi...

Markets ● 3 months ago
Old Mutual Exchange Traded Funds lists on the ZSE

Old Mutual ETF debuts on the ZSE Makes history as the first ETF to be traded on the ZSE More ETF listings expected in the near future Old Mutual became the first entity to successfully list and trade Exchange Traded Funds (ETFs) on the Zimbabwe Stock Exchange, after trades valued at $4,74 million were completed as the market resumed post holidays. Prior to the introduction of ETFs, the ZSE...

Markets ● 4 months ago
Powerspeed shareholders okays delisting

Shareholders voted to cut ties with the ZSE at an EGM The company had previously lamented that their listing was no longer beneficial The company will now proceed to buy back shares from minority shareholders The shareholders of electrical and hardware supplier, Powerspeed Electrical limited have approved a proposition to delist from the local bourse on the basis that it is no longer benefi...

Markets ● 4 months ago
FBC taps into the mobile money business

Financial institution and investment holding company FBC Holdings Limited has launched a mobile merchant and bill payments option capping a year of solid market moving digital products release. Since embarking on a digitisation program in 2018, the financial services group, has never been at its strongest than the current year. Earlier this year the bank went paperless, with automation of new acc...