13th Feb 2025 08:56
(Alliance News) - British American Tobacco PLC reported on Thursday it had restored its profitability in 2024, but revealed it had incurred steep operating costs and warned of "significant" regulatory and fiscal headwinds in Bangladesh and Australia.
The London-based maker of cigarette and vaping products swung to pretax profit of GBP3.54 billion in 2024, from a loss of GBP17.10 billion in 2023.
A year earlier, the owner of Dunhill and Kent suffered depreciation, amortisation and impairment costs amounting to GBP28.61 billion, compared to GBP3.10 billion in 2024, mainly related to its acquired US combustible brands.
Revenue in 2024 was GBP25.87 billion, down 5.2% from GBP27.28 billion in 2023, driven by the sale of its businesses in Russia and Belarus in September 2023 and "translational" currency headwinds.
Adjusted organic profit from operations was up 1.4% in 2024.
BAT reported "other" operating expenses of GBP13.10 billion, up 74% from GBP7.54 billion.
"2024 was an investment year with delivery in line with our guidance," BAT Chief Executive Officer Tadeu Marroco said, adding that the group added 3.6 million adult consumers to a total of 29.1 million of its Smokeless products. Smokeless products now account for 18% of the group's total revenue.
Marroco said performance for the group accelerated in the second half of 2024, driven by the phasing of New Categories and the benefits of investment in US commercial actions, and the unwind of related wholesaler inventory movements.
In the US, BAT's targeted investments had strengthened the business, despite a challenging macro-economic backdrop and a growing presence of illicit single-use vapour products, he said.
BAT improved final dividend to 240.24 pence from 230.88p, lifting the total payout to 235.52p, up 2.0% from 230.90p.
It said it it committed to dividend growth in sterling terms, and GBP900 million share buy-back.
In 2025, BAT expects "significant" regulatory and fiscal headwinds in Bangladesh and Australia to hurt combustibles performance.
Looking ahead, BAT said it remains committed to returning to its mid-term guidance of 3% to 5% revenue and 4% to 6% adjusted profit from operations growth on a constant currency in 2026.
BAT expects global tobacco industry volume to fall 2% in 2025.
Shares in BAT traded 7.1% lower at ZAR723.27 each on Thursday morning in Johannesburg. In London, shares shed 7.6% to 3,135.00 pence each.
By Artwell Dlamini, Alliance News reporter
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