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.