BAT Malaysia focuses on sustainability amid lower earnings

KUALA LUMPUR: British American Tobacco (M) Bhd (BAT Malaysia) said it remains focused on sustaining its performance through its strong Dunhill and combustibles portfolio, prudent cost management, and a responsible stance on regulatory and fiscal matters.

“The group remains steadfast in its purpose of creating A Better Tomorrow™, delivering long-term value for shareholders while contributing to a regulated and sustainable industry in Malaysia,” the tobacco company said in a statement.

In the third quarter ended Sept 30, BAT Malaysia reported a lower net profit of RM7.02mil, or 2.50 sen per share, bringing its nine-month profit down 39.4% to RM81.2mil, or 28.50 sen per share.

Quarterly revenue halved to RM300.8mil, while year-to-date revenue declined 25% to RM1.25bil.

The Board of Directors has declared a third interim ordinary dividend of 5.0 sen per ordinary share amounting to RM14.3mil, payable on Dec 5, 2025.

BAT Malaysia managing director Nedal Salem said the group’s performance reflects the resilience of its core combustibles portfolio, particularly Dunhill, which has continued to grow its market share over the past nine months.

“Despite the regulatory changes and overall market volume pressures, our disciplined approach to cost management and operational efficiency enabled us to safeguard profitability and maintain stability in our financial performance.

“Looking ahead, we are encouraged by the targeted fiscal initiatives announced under Budget 2026, which are expected to boost disposable income and support household consumption. We remain focused on strengthening our fundamentals, optimising our portfolio and executing with discipline to ensure long-term sustainability,” he said.

Following the tabling of Budget 2026, the government announced an excise duty increase of RM0.02 per stick, effective Nov 1, 2025.

BAT Malaysia said while the full impact is still being assessed, it hopes the hike will not worsen the illegal tobacco trade and that the government will maintain its commitment to tackling the issue, which still accounts for about 54% of total consumption.

“The Government’s allocation of over RM700mil to strengthen enforcement and digitalisation, including initiatives such as digital tax stamps and enhanced screening systems, are positive measures towards curbing tax leakages. With stronger enforcement, we see potential for a gradual recovery in legal market volumes.

“BAT Malaysia remains committed to supporting efforts to combat the tobacco black market and encourages continued industry engagement to ensure practical, effective, and sustainable outcomes,” Nedal said.