HARARE – British American Tobacco Zimbabwe (BAT Zimbabwe) is facing a tough business environment in Zimbabwe, with a recent trading update revealing a significant decline in sales volumes.
The company, which manufactures and distributes cigarettes, has seen a 21% drop in sales for the three months ended March 31, 2024, compared to the same period last year.
The trading update points to a confluence of negative factors impacting BAT Zimbabwe’s performance. The country’s ongoing struggles with currency volatility, high credit risk, and hyperinflation are squeezing consumer purchasing power.
This has led to a significant decline in demand for cigarettes, a trend reflected in the plummeting sales figures.
BAT Zimbabwe’s revenue has also taken a hit, dropping by 6% as a result of the reduced sales volume. The company is attempting to mitigate the situation through strategic pricing and marketing initiatives, but the overall outlook remains challenging.
“Zimbabwe’s operating environment continues to face a wide range of challenges including currency volatility, high credit risk and hyperinflation.
These challenges have severely impacted the business, its customers, and other stakeholders. However, BAT Zimbabwe has remained resilient, exploring different avenues to generate value for its shareholders, consumers, employees and society.
“For the three months ended 31 March 2024, the Company experienced a 21% decline in sales volumes compared to the same period last year. This decline was attributed to fiscal policy changes and rising inflation which eroded consumer purchasing power.
“As a result of the reduced sales volumes, the Company recorded a 6% decline in revenue. The Company continues to implement strategic pricing and marketing initiatives to adapt to the changing trading environment,” says BAT Chairman Lovemore Manatsa.
While the company acknowledges these difficulties, the update also highlights BAT’s focus on “A Better Tomorrow” and its commitment to creating “A Smokeless World.”
“This is a focus on reducing the health impact of our business through offering adult smokers a greater choice of alternative products.
“With sustainability at the front and centre of everything that we do, this transformation is underpinned by our Environment, Social and Governance (ESG) priorities. We look forward to continuing to work with various stakeholders to achieve this.
“Looking ahead, we are confident that our continued investment in the simplification of our business, our growing consumer-centric product portfolio and a winning culture, will enable us to deliver sustained shareholder value and contribute to the socio-economic growth, and the development of the country,” the company noted.
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