British American Tobacco Malaysia Berhad reported an 11% increase in net profit for the financial year ended 2025 (FY2025), supported by disciplined cost management and continued strength in its combustible tobacco portfolio despite a tougher regulatory environment.
Speaking at the group’s 65th Annual General Meeting on Wednesday, BAT Malaysia said profit from operations rose 9% year-on-year, even as revenue declined 5% to RM2.18 billion.
The tobacco company said FY2025 was marked by multiple industry challenges, including tighter vapour regulations, higher tobacco excise duties, the implementation of the retail display ban and updated pictorial health warnings.
Despite these headwinds, the group maintained profitability through cost optimisation measures and a sharpened focus on its core cigarette business.
BAT Malaysia also announced a higher dividend payout for shareholders, increasing its FY2025 dividend to 63.5 sen per share from 59 sen previously, while maintaining a payout ratio of 90% of total earnings.
Managing director Nedal Salem said the company remains focused on strengthening its key brands, with Dunhill continuing to lead the premium cigarette segment in Malaysia.
“Our unwavering focus remains on our key brands. We are sharpening our brand strategies to invest in products with the greatest potential for long-term, sustainable returns, ensuring BAT Malaysia remains competitive, adaptable and a consistent creator of shareholder value,” he said.
The company noted that the illegal tobacco trade remains the industry’s biggest challenge, accounting for nearly 55% of total market volume.
However, BAT Malaysia said enforcement efforts had contributed to a slight decline in black market tobacco penetration, which eased to 54.4% in 2025 from 55% in the previous year.
Salem said enforcement agencies had made meaningful progress in curbing illicit tobacco activities, but stressed that broader strategic measures were still needed to restore market integrity and protect government tax revenues.
He added that BAT Malaysia remains prepared to work closely with regulators and policymakers to strengthen the legal tobacco market.
Looking ahead, the group said it would continue prioritising disciplined execution, stronger brand positioning and improved route-to-market capabilities to navigate ongoing industry challenges while sustaining shareholder returns.
