PHILLIMON MHLANGA
LISTED cigarette manufacturer, British American Tobacco Zimbabwe (BATZ)’s turnover in the nine months to September dropped 18% weighed down by continued pressure on consumers’ disposable income.
In a trading update published Thursday, company secretary, Pauline Kadembo, said the company’s premium brand, Dunhill recorded a significant decline because the company was finding it difficult to import the brand. Zimbabwe is hit by acute shortage of foreign currency.
Other brands, namely Aspirational Premium, Newbury, Kingsgate, Everest and Madison, also declined compared to same period last year.
The trading update comes after BAT Zimbabwe failed to publish interim financials for the third quarter due to the limited time and processes required in terms of the International Accounting Standard 29-Financial Reporting in Hyperinflation Economies.
Kadembo said the worsening economic conditions, characterised by shortages of foreign currency, plunging Zimbabwe dollar, high inflation and persistent power outages resulted in depressed volumes.
In addition to that the change in cigarette excise regime from a single specific excise regime to a mixed regime system also worsened the situation.
“The company recorded an 18% decline in volumes compared to the same period last year driven by the continued pressure on the consumers’ disposable income,” Kadembo said.
“The company’s Premium brand, Dunhill, (which constitutes 2% of the total volume), recorded a 92% decline driven by the Company’s inability to import the brand, given that excise duty is payable in foreign currency. On the other hand, the Aspirational Premium brands, Newbury and Kingsgate, saw a single-digit decline of 3% compared to same period last year.
“The Value for Money segment, Everest and Madison, declined by 17% and Low Value for Money brand, Ascot, was 27% down compared to same period last year.”
Publishing financials for the third quarter would have provided more information on the state of affairs at BAT Zimbabwe.
