Cigarette maker British American Tobacco’s Zimbabwe unit reported higher first-half profit after raising prices and cutting costs, it said on Monday, despite a drop in sales due to a depressed economy.
BAT Zimbabwe, which is 44 percent owned by London-listed British American Tobacco, said after-tax profit rose to $7.7 million in the half year to end-June compared with $5.3 million in the comparable period in the previous year.
The firm’s Finance Director Peter Doona also told an analyst briefing that headline earnings per share increased to 0.37 cents from 0.26 during previously.
Sales declined by 5 percent to 603 million cigarettes in the half year period from 636 million cigarettes a year ago.
“In terms of our activities to (increase sales) volumes, we will be focusing on distribution and this is basically going into untapped areas … that we never used to cover before as the economy becomes more and more informal,” said Lovemore Manatsa, the firm’s managing director.
BAT Zimbabwe accounts for 82 percent of cigarettes sold in the southern African country, where companies are struggling with high operating costs, competition from cheaper imports and biting electricity shortages.
The economy, where mining contributes around 17 percent to GDP, is expected to struggle this year due to low commodity prices and a poor farming season.