Rare! British American Tobacco Malaysia Reports Historic First Loss

British American Tobacco Malaysia (BAT Malaysia) has reported its first quarterly loss since the merger of Rothmans of Pall Mall and Malaysian Tobacco Company in 1999. The company stated that this was primarily due to rising regulatory costs and the worsening illegal cigarette trade in Malaysia.

For the first quarter ending March 31, the company recorded a net loss of 35.2 million ringgit (approximately 8.8 million USD), compared to a net profit of 23.3 million ringgit (approximately 5.8 million USD) in the same period last year; meanwhile, the company's operating revenue plummeted from 322 million ringgit (approximately 80.5 million USD) in the same period last year to 160.3 million ringgit (approximately 40 million USD).

Driven by one-time compliance costs resulting from Malaysia's retail tobacco display ban and restructuring expenses triggered by the new "route-to-market" strategy, the company's operating expenses surged by 74.7% year-on-year to 64.68 million ringgit (approximately 16.2 million USD) in the first quarter.

BAT Malaysia noted that the sales volume of legal traditional cigarettes decreased by 4.5% this quarter. Meanwhile, the proportion of illegal cigarettes in the total industry sales rose from 54.4% in the previous quarter to 56.7%, marking the first increase in this ratio since 2021.
Additionally, the company announced an interim dividend of 5 sen (approximately 0.0125 USD) per share, down from 7.5 sen (approximately 0.0188 USD) in the same period last year. The company's management stated that the first quarter was a transitional period during which the company implemented business adjustments aimed at enhancing long-term competitiveness and operational efficiency.