TINASHE MAKICHI
British American Tobacco Zimbabwe (BAT)’s turnover surged 75% in the first quarter to March 31, 2021 from the prior comparative period driven by price increases and revenue generated from the export of cut-rag tobacco.
Volumes for the group increased 3% during the reviewed period on the back of increased consumer’s uptake in the Value for Money brands.
The increase in sales comes despite Covid-19 environment where there was reduced economic activity which had a huge impact on disposable incomes for most consumers.
“The company continued to face an adverse trading environment during the quarter ended March 31, 2021, primarily attributable to the impact of the Covid-19 pandemic and the national lockdown measures instituted to contain the spread of the pandemic,” BAT board chairman Lovemore said in a trading update for the quarter.
He added: “The company continues to proactively review its business model and related strategies to ensure the long-term growth and sustainability of the business.”
Volumes for BAT’s premium brand, Dunhill, increased by 91% as it returned to the market in the final month of the first quarter.
The Aspirational brands, Dunhill Newbury and Dunhill Kingsgate volumes, however, declined by 55% compared to the same period in prior year mainly due to reduced consumer disposable incomes hit by the Covid-19 pandemic.
Consumer uptake in the Value for Money brands, Madison and Everest moved up by 10% relative to the same period in prior year while Low Value for Money brand, Ascot, declined by 43%.
In the short-term, Manatsa expects the economic environment to improve from the impact of the Covid-19 pandemic as the government’s drive for vaccinations and economic activity appears to be steadily returning to normal.
He noted that Zimbabwe’s reduced inflation rate since the month of February 2021 coupled with the continued access to foreign currency by companies from the weekly foreign currency auction are reflective of the improving macro-economic factors. “BAT remains confident that its brand portfolio and route to consumer/ market is sustainable to enable the business to deliver value growth to our shareholders,” he said.
