Why BAT shares rose 2.6% last week
|CREDIT| BAT Kenya|
BAT Kenya (BAT) shares rose 2.6% to Ksh520 in the week ended July 19. The shares jumped after the company reported strong results for the first half of 2019 – the six months period through June.
BAT reported revenue of Ksh19.2 billion for the first half of 2019, representing an increase of more than 10% over the revenue it generated in the first half of 2018. The company made a profit of Ksh2.5 billion in the latest period, representing an increase of 25.8% over the profit it made in the first half of 2018.
BAT’s revenue increase in the latest period was supported by cigarette price adjustments in Kenya and strong tobacco sales in Sudan. Better cost controls helped drive up profits in the period.
Even as BAT reported strong results for the first half of 2019, the company also complained that underground trade in cigarettes continues to hurt its business in Kenya, its largest market. The company’s chief executive Beverley Spencer-Obatoyinbo said that underground cigarette sales in Kenya accounts for 14% of the cigarette market in the country. The underground cigarette business is giving legitimate cigarette brands unfair price competition, thereby hurting sales.