Displayed samples of packets of cigarettes. Photo/PHOEBE OKALL

British American Tobacco subsidiary BAT (U) had its gross revenue grow by eight percent last year, the company says in its audited statement for the year ended December 31, 2017.

The eight percent growth meant that gross revenue rose to Shs149.7b from Shs138.4b in 2016 and, according to the financial statement, the rise was a result of increase in the prices of tobacco products in the second half of 2017.

The company also reports that profit after tax rose by 55 percent to Shs12.08b in 2017 from Shs7.8b in 2016. The company attributes the increase to price increases and lower operating costs.

“Operating margin improved significantly from 17.2 percent to 25.5 percent during the year the year, reflecting growth in profitability and lower operating costs,” the financial statement signed on February 14 by the Company Secretary Nicholas Ecimu says.

Meanwhile, the Board of Directors has recommended a final of Shs246 per share to be presented for approval at the Annual General Meeting in May 2018. “If approved, the dividend which is subject to withholding tax will be paid to shareholders on June 21, 2018.

The company however says that the enactment of the Excise Duty (Amendment) Act 2017 caused challenges presented by different rates for locally manufactured products and those products imported from East Africa Community member states.

‘The steep and discriminatory excise increase has not only given our competitors an unfair advantage over our products, but threatens our viability by rendering our products uncompetitive’, the company indicates.

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