British American Tobacco PLC said on Thursday its first-half performance for 2024 was in line with its expectations, and indicated that it is on track to deliver its full-year guidance.
The London-based cigarette and vaping products maker reported a 5.7% rise in pretax profit to £5.60 billion for the first half of 2024 from £5.30 billion a year earlier, boosted by profit from ‘associates and joint ventures’.
Share of post-tax results of associates and joint ventures surged to £1.65 billion from £289 million.
But revenue fell 8.2% to £12.34 billion from £13.44 billion, driven by the sale of businesses in Russia and Belarus in September 2023, and currency headwinds.
Revenue from new categories was down 0.4% to £1.65 billion. BAT expects to deliver improvement in revenue and profitability across its new categories for the full year.
Combustibles in Africa & Middle East, and Asia Pacific, the Middle East and Africa reported ‘resilient’ organic performances, with solid volume share growth. These were offset by the US, with combustibles industry volumes in that country remaining under pressure, thanks largely to macro headwinds and the continued lack of effective enforcement against illicit single-use vapour products.
BAT declared an interim dividend of 235.52 pence, up 2.0% from 230.90p.
The company said it has agreed to buy back shares from Goldman Sachs International from Thursday this week to October 14. It repurchased 106,951 shares at an average 2,569.63p from UBS on Wednesday.
BAT said it welcomed the US Food & Drug Administration’s marketing authorisation for its Vuse Alto device and tobacco flavour consumables.
However, the continued lack of enforcement against illicit single-use vapour products in the US, compounded by the sale of its businesses in Russia and Belarus, means that new category revenue is likely to be below its £5 billion ambition in 2025.
The cigarette maker expects the second-half acceleration, driven by the roll-out of product innovations, US commercial actions gaining traction in the first-half of 2024 and the unwind of wholesaler inventory movements.
BAT expects global tobacco industry volume to fall 2% in 2024, with continued weakness in US, France and Sudan, offset by an improving outlook in Turkiye and Mexico.
For the 2024 guidance, the company guides for low-single figure organic constant currency revenue growth and also low-single figure organic adjusted profit from operations growth.
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