British American Tobacco Zambia (LUSE: BATZ) reported a 28% year-on-year decrease in net profit to K47 million in financial year (FY) 2014. Earnings Per Share (EPS) was down to K0.22 (K0.31 in 2013):
The decrease in net profit was driven by:
- Decline in sales volumes
- Higher product costs as a result of the Kwacha's decline
- Certain non-recurring expenditure
Operating profit decreased by 25% year-on-year to K76 million in FY 2014.
Revenue declined by 5% year-on-year to K195 million as the company saw a 10% decline sales volumes in FY 2014:
The drop in revenue was driven by increased trade in illicit cigarettes and a reduction in consumer spending. The drop in sales volumes was experienced across the company's Pall Mall and Peter Stuyvesant products despite a 25% growth in their Dunhill Switch variant product.
Their stock price closed the year at K5.75 on the Lusaka Stock Exchange (LUSE), up 21% in 2014.
The Directors recommended a final dividend of K0.14 per share for FY 2014 to be approved at the annual general meeting to be held in April 2015.
Trying to decipher this puzzle that is Zambia by using a variety of publicly available data (structured and unstructured) in conjunction with my own skill/experience. * * *