BAT Malaysia recorded an 8% decrease in revenue to RM522 million against RM567 million registered in the same period a year ago. The group added the decrease was due to a volume decline caused by the onset of the Omicron variant that affected purchasing habits during the said quarter, the persistently high illicit cigarette incidence, and other seasonal factors.
Its cost rationalisation efforts successfully reduced operating expenses by 14% or RM8 million compared to the same quarter last year. This mitigated the impact of lower volume on its profit from operations, which was marginally lower at RM82 million compared to RM87 million in the corresponding quarter a year ago. Dunhill’s share of the premium segment grew by 0.7 percentage points (ppt) to 61.9%, further strengthening its market leadership position. The Group’s Value-for-Money (VFM) brands, Rothmans and KYO, also grew by 1.0ppt to 35.0% share of segment as compared to the same period last year.
The growth in these strategic segments cushioned the impact of the 1.3ppt reduction in share of market for its Aspirational Premium (AP) brands following the transition of Pall Mall to Peter Stuyvesant as part of the company’s portfolio optimisation strategy. Overall, the company’s total market share stood at 51.9%, a decline of 0.5ppt compared to Q1 FY2021. Nedal Salem, managing director of BAT Malaysia, said, “BAT Malaysia is maintaining the growth trajectory of its strategic brands within its Premium and Value-For-Money segments. This is in tandem with the company’s aim to deliver combustible value growth.”Concurrently, BAT Malaysia is also poised to benefit further from its future-fit route-to-market hybrid
sales model and digital transformation initiatives, all of which will play a role in creating a simpler and faster organisation,” he explained.
On the tobacco black market, Nedal said, “The tobacco black market, which currently commands close to 60% of the total market, continues to weigh down on the performance and operations of the legal industry and cause the government to lose about RM5 billion annually in uncollected tax revenue.” “We believe there is a risk that the tobacco black market prevalence may increase further as a result of the re-opening of borders and the resumption of cross-border trade and travel. This may potentially reverse the downtrend achieved in 2021 following measures put in place by the Government to curtail
this problem,” he said.
BAT also said vape regulations must be premised on scientific-evidence and data-driven facts so as to allow Malaysian smokers access to alternatives with reduced-risk potential to smoking and ensure the products used are compliant with quality and safety standards.
