BRITISH American Tobacco Zimbabwe has posted a US$2 million profit for the interim period ended June 30, 2011 on the back of the improving economic environment.
During the period, turnover for the group increased 88 percent to US$17,5 million resulting in an operating profit of US$2,7 million up from US$367 000 recorded in the prior year.
In a statement accompanying the results, group chairman Mr Kennedy Mandevhani said the increase in administrative expenses represents an investment in the improvement of the group’s business.
“The increase in administrative expenses represents an investment in the improvement of our business results and towards continued success into the future resulting largely from aligning remuneration levels to market- related positions and for expert business support services and advice from the BAT group.
“The key factors to the success of the business continues to be the investment behind our people and brands so as to deliver the appropriate communication to our consumers and ensuring that our brands remain the preferred quality option,” said Mr Mandevhani.
He also added that the domestic cigarette sales volumes were 54 percent higher than the same period last year and this is primarily attributed to the strong equity of the company’s brand portfolio, stable currency and improvements in the economic environment.
The cut rag sales to Mozambique finished 58 percent higher than the same period last year.
“This volume increase results from increased demand as well as timing differences where exports started from march in 2010 but have been consistent in 2011 since January,” he said.
Mr Mandevhani also said that the company expects trading conditions to continue to be favourable in the second half of the year as the economy continued to improve.
“British American Tobacco Zimbabwe is confident that the benefits contained in economic growth, the multiple-currency economy and forecast levels of inflation, will ensure that business results continue to be firm in the second half of 2011,” he said.