British American Tobacco in New Zealand (BAT NZ) is the largest tobacco company, which produces Dunhill cigarettes. Recently it reported its biggest annual profit since 1999, after revenues increased by 15% as it cut costs while increased excise tax hiked prices.
According to the report, the tobacco company boosted profit to $132 million in 2013 from $115 million in 2012. According to financial statements, since 1999 it is the biggest annual profit of the company in the New Zealand. It paid and declared dividends of $122 million in 2013, which in 2012 was $139.2 million. The company’s revenue together with excise duties increased 3.6% to $1.21 billion, while selling, marketing and distribution costs reduced by 17% to $60.8 million. The cost of sales increased by 3.6% to $963.5 million.
The matrket share in the New Zealand was higher, but volume was affected by the industry shrinkage. Profit increased occured due to price increases and cost savings. The parent comapny reported a 2.7% decline in volume to 676 billion cigarettes in 2013, while sales worldwide were flat at 15.3 billion pounds. BAT group earnings increased by 3% to 5.55 billion pounds in 2013.
BAT is number one in the local cigarettes market in the New Zealand. On the second place goes Imperial Tobacco with sales of $432 million in 2013 and on the third place is Phillip Morris with sales of $83 million in 2013.
Since 2012 the country increases the tobacco excise by 10% each year. This is the country’s strategy to reduce number of smokers.The increases are expected to raise the average price of a cigarettes pack to more than $20 by 2016.
Dawn O’Connor, the spokeswoman for BAT NZ, told that tobacco use in New Zealand is lowering due to tax increase, because people prefer to quit than to pay more.