Ksh350 million dividend on tap for BAT Kenya shareholders

Ksh350 million dividend on tap for BAT Kenya shareholders

BAT Kenya is whittling down its operating costs, allowing profit to rise. But the company continues to grapple with other challenges, including competition from counterfeit and black market cigar.

 

BAT Kenya CEO Beverley Spencer-Obatoyinbo

 

BAT Kenya PLC (BAT) braved the coronavirus turmoil to deliver a profit rise in the first half of 2020. The cigarette maker posted a profit of Ksh2.7 billion for the six months through June 2020, rising from a profit of Ksh2.5 billion in the six months through June 2019.

Notably, the profit jumped on better cost controls. Operating costs dropped to Ksh6.8 billion from Ksh7.6 billion last year, reflecting a decrease of more than 10%. BAT Kenya is shifting to an advanced manufacturing technique that is in turn allowing it to cut production costs and boost profits. The drop in costs allowed for the profit rise despite BAT Kenya reporting a 7% decline in net revenue to Ksh10.5 billion from Ksh11.3 billion last year.

In addition to the coronavirus headwinds that reduced cigarettes demand, BAT Kenya continues to struggle with unfair competition from counterfeit and black market cigar. That caused the drop in revenue in the latest period.
BAT Kenya has lined up Ksh350 million in dividends for its shareholders out of the profit it made in the first half of the year. Notably, the proposed first half dividend amount is about 13% of the profit the company made in the period. BAT Kenya plans to pay a dividend of Ksh3.50 per share in September to those who will be shareholders as of August 21.
Notably, the September dividend will only be an interim payout as the company could still pay more dividends out of the profit it makes in the second half of the year. BAT Kenya’s dividend payout from the 2019 profit was Ksh33.50 per share.
BAT Kenya recently added Isuzu East Africa CEO Rita Kavashe to its board of directors.
Finally, BAT Kenya shares closed at Ksh310 on Thursday (July 16). The stock is down 38% this year.
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