Uganda remains a crucial market for the cigarette-manufacturer British American Tobacco.
Its Uganda subsidiary, British American Tobacco Uganda (BATU), will dish out its highest dividend to shareholders since listing on the Uganda Securities Exchange more than a decade back, after it posted strong revenue and profit growth. The company registered revenue growth of Shs 223.7bn in 2011, up from Shs 212.2bn in 2010, posting a modest 5% increase.
According to Isaac Ampeire, the Company Secretary, revenue growth was largely driven by cigarette sales volumes, which went up by 20% after a good performance by the company's most popular brand Sportsman. Tobacco leaf exports benefited from a weaker shilling during 2011 although the export shipment volumes were lower by 23 percent due to the current global over-supply of tobacco, the company said.
Profit after tax went up to Shs 22bn in 2011 from Shs 11.177bn in 2010. Meanwhile, operating profit increased to Shs 40bn, up from Shs 32.9bn in 2010. "The 22% improvement in operating profit reflects the impact of the growth in revenue as well as the focused efforts by management in minimizing operational cost increases through productivity savings in spite of significant inflationary pressures in 2011," Ampeire noted.
BAT Uganda remained a significant contributor to government's treasury. Tax payments grew to a record Shs 64bn in 2011, an increase of 13 percent over the previous year. The directors have recommended a final dividend of Shs 309 per share, which amounts to Shs 15.16bn. The dividend which is subject to withholding tax will be paid before June 15, 2012 to shareholders on the register at the close of business on April 30, 2012.
Taking into account the interim dividend of Shs 141, together with the proposed dividend of Shs 309, the total dividend in respect of 2011 is 450 per share an increase of 97 percent compared to Shs 228 given out last year. Ampeire says the company is mindful of the tough economic events globally, but that it will not stop investing in its products.
"We are, however, cognisant of the global economic challenges that have a knock-on impact on the local economy, coupled with the challenges posed by illicit trade, pending tobacco legislation, cigarette taxation, the shilling volatility and continued ìsoftî demand for tobacco globally," he said.
"Amidst these challenges, we will continue to invest behind our brands and distribution network and improve the quality of the tobacco grown by our farmers. We shall continue engaging with the relevant stakeholders on these and other issues in an effort to promote sensible legislation and taxation with regard to our industry," he added.