BAT to pay Sh50 dividend despite 19pc profit dip
Business
By
Nanjinia Wamuswa
| Feb 22, 2025
BAT Kenya has reported a 19 per cent drop in pretax profit due to a rise in financing costs, but has maintained its strong dividend policy for the year ended December 31, 2024.
In results published yesterday, the company said it had navigated a 955 per cent rise in financing costs due to forex losses, to post a net revenue increase of one per cent to Sh25.7 billion.
While pretax profit dipped Sh6.5 billion, the company announced an expected total dividend payout of Sh50 per share for 2024.
This is a dividend yield of 13 per cent, cementing the BAT Kenya stock as one of the highest yielding on the Nairobi Securities Exchange (NSE).
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BAT Kenya managing director Crispin Achola said the company endured various headwinds across its domestic and export markets.
“In Kenya, this was characterised by geopolitical tensions marked by prolonged civic demonstrations which interrupted our supply chain and trading activities, foreign exchange losses, rising interest rates, cost of living pressures on consumers, regulatory uncertainty, and a surge in illicit trade cigarettes to 37 per cent (third party research) by the end of the year,” he said.
“In our export markets, which contribute almost half of BAT Kenya’s turnover based on the company’s business model, significant regulatory changes in some markets adversely impacted consumer purchase dynamics leading to volume decline.”
In others, forex scarcity prevailed for most of the year, leading to both delayed shipments and payments, the MD said.
“The company remains resilient, maintaining solid fundamentals. This is further evidenced by the board’s proposed final dividend payout of Sh45 per share, in addition to the interim dividend of Sh5 per share paid to shareholders in September 2024.”
This brings the total dividend for the 2024 financial year to Sh50 per share, representing a one per cent improvement in yield to 13 per cent compared to 2023.
Total cost of operations increased by four per cent to Sh18.4 billion, reflecting the higher cost of doing business.