British American Tobacco Slips To Hefty Loss In FY23; Sees Organic Growth Ahead

(RTTNews) - British American Tobacco Plc (BATS.L, BTI) reported Thursday a hefty loss in its fiscal 2023, compared to prior year's profit, hit by impairment charge of 27.3 billion pounds, and slightly lower revenues.

For the year, loss before taxation was 17.06 billion pounds, compared to prior year's profit of 9.32 billion pounds. Loss attributable to owners of the parent was 14.37 billion pounds, compared to profit of 6.67 billion pounds a year ago.

Loss per share was 646.6 pence, compared to prior year's profit of 291.9 pence.

The company said it has taken a non-cash impairment charge of 27.3 billion pounds in fiscal 2023, mainly relating to acquired U.S. combustibles brands.

The company said the charge was taken consistent with its vision to 'Building a Smokeless World', a predominantly smokeless business, with 50 percent of revenue from Non-Combustibles by 2035, and taking into account the current macro-economic pressures impacting the U.S. combustibles industry, the growth of illicit single-use vapour products and uncertainty around a potential menthol ban in the U.S.

Adjusted earnings per share were 375.6 pence, compared to last year's 371.4 pence.

Revenue for the year was 27.283 billion pounds, compared to 27.655 billion pound s a year ago. Revenue was down 1.3 percent on a reported basis, but up 3.1 percent on an organic basis, driven by New Categories organic revenue up 21.0 percent and resilient pricing

Further, the company announced dividend growth of 2.0 percent to 235.52p, in line with progressive dividend increase approach.

Looking ahead for fiscal 2024, the company projects global tobacco industry volume to be down around 3 percent mainly due to the U.S. and Indonesia.

Low-single figure organic revenue growth and continued progress is expected towards its 2025 5 billion pounds New Category revenue ambition. The company also projects low-single figure organic adjusted profit from operations growth in 2024.

Performance is expected to be second half weighted given planned investment phasing and expected slow recovery in U.S. macros.

Tadeu Marroco, Chief Executive, said, "We are investing to strengthen our U.S. business, accelerate innovation momentum, and enhance capabilities that support our strategic delivery. We expect these investments, together with the U.S. macro-economic pressures, will impact 2024. Thereafter, we will progressively build to deliver 3-5 percent organic revenue, and mid-single digit adjusted organic profit from operations growth by 2026 on a constant currency basis."

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