By Edwin Muhumuza
British American Tobacco Uganda has posted gross revenues of Ushs 86.2 billion and a profit before tax of Ushs 9.7 billion.This in its half year results for the six months ended 30 June 2019.
BAT Uganda Managing Director, Mathu Kiunjuri said that in the first half of 2019, gross revenue increased by 17% to Ushs 86.2 billion driven by growth in volumes due to distribution efficiencies and portfolio transformation. Profit from operations increased by 11% to Ushs 9.8 billion due to the growth in revenues, partly offset by higher cost of operations.
The increase in cost of operations was in line with volume growth, inflationary increases and additional investment in the brand portfolio.
Profit before tax increased by 9% to Ushs 9.7 billion in line with growth in revenues, offset by finance lease costs recognised in line with revised accounting standards said Kiunjuri.
BAT Uganda Chairman, Hon. Elly Karuhanga said in as much as contribution to Government revenues in the form of Excise Duty, Value Added Tax and Corporation Tax increased by 19% to Ushs 50.2 billion, illicit trade in tax- evaded tobacco products continues to pose a threat to Government revenues and shareholder value.
According to third party research findings, the market saw an increase in illicit tax-evaded cigarette sales in the first quarter of this year, standing at 22.2%,translating into an estimated loss in Government revenue of UShs 30 billion annually.
“Whilst we applaud the Government of Uganda for steps taken to address the cost of doing business in this market, we reiterate that the trade in illicit tax-evaded cigarettes continues to pose a threat to the legitimate tobacco industry and sustainability of Government revenues,” He noted.
Karuhanga also expressed confidence in the exceptional quality of talent within the Company and partnerships with over 30,000 business partners, as the right strategy to deliver business growth and continued value to all stakeholders.