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BAT Zimbabwe reports 7% drop in cigarette consumption
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British American Tobacco (BAT) Zimbabwe has reported a 7% decline in cigarette consumption, a trend it attributes to reduced disposable incomes amid ongoing macroeconomic pressures.
In its trading update for the nine months ended September 30, 2025, BAT chairperson Lovemore Manatsa said sales volumes fell to 593 million sticks, resulting in a 22% drop in revenue to US$21 million compared to the same period last year. The company cited stretched consumer spending, challenging economic conditions, and a shift from ZWG to US dollar pricing as key factors behind the decline.
Despite falling volumes and revenue, BAT Zimbabwe saw a significant turnaround in profitability. Profit before tax rose to US$11 million, up from a US$3 million loss during the same period last year-a 491% year-on-year increase. The improvement was largely due to reduced foreign-exchange losses and lower inflationary pressures.
Operating costs dropped sharply to US$10 million, a 66% decline from the previous year, reflecting lower forex losses, easing inflation, and cost-management initiatives. BAT also highlighted that enhanced distribution efficiency, closer engagement with traders, and performance-focused trade programmes supported volume delivery.
Manatsa described the external environment as "dynamic but relatively stable," noting steady inflation and a more stable exchange rate driven by ongoing monetary policy interventions.
However, challenges remain, including liquidity constraints, high borrowing costs, and frequent power outages disrupting industrial productivity.
"Looking ahead, the Company remains focused on reinforcing the strength and sustainability of the business by driving volume recovery through increased focus on the value segment, improving product availability across all markets and channels, and enhancing operational efficiency by optimising supply-chain processes and reducing our cost to serve in order to protect profitability," Manatsa said.
Market forecasts suggest that despite current declines, national cigarette consumption in Zimbabwe could reach 531.4 million sticks by 2030.
In its trading update for the nine months ended September 30, 2025, BAT chairperson Lovemore Manatsa said sales volumes fell to 593 million sticks, resulting in a 22% drop in revenue to US$21 million compared to the same period last year. The company cited stretched consumer spending, challenging economic conditions, and a shift from ZWG to US dollar pricing as key factors behind the decline.
Despite falling volumes and revenue, BAT Zimbabwe saw a significant turnaround in profitability. Profit before tax rose to US$11 million, up from a US$3 million loss during the same period last year-a 491% year-on-year increase. The improvement was largely due to reduced foreign-exchange losses and lower inflationary pressures.
Operating costs dropped sharply to US$10 million, a 66% decline from the previous year, reflecting lower forex losses, easing inflation, and cost-management initiatives. BAT also highlighted that enhanced distribution efficiency, closer engagement with traders, and performance-focused trade programmes supported volume delivery.
However, challenges remain, including liquidity constraints, high borrowing costs, and frequent power outages disrupting industrial productivity.
"Looking ahead, the Company remains focused on reinforcing the strength and sustainability of the business by driving volume recovery through increased focus on the value segment, improving product availability across all markets and channels, and enhancing operational efficiency by optimising supply-chain processes and reducing our cost to serve in order to protect profitability," Manatsa said.
Market forecasts suggest that despite current declines, national cigarette consumption in Zimbabwe could reach 531.4 million sticks by 2030.
Source - NewZimbabwe
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