KUALA LUMPUR (Oct 27): British American Tobacco (M) Bhd's (BAT) net profit for the third quarter ended Sept 30, 2022 (3QFY22) dropped by 4.34% to RM75.25 million from RM78.67 million a year ago, due to non-deductible expenses and one-off prosperity tax introduced this year which is chargeable for income above RM100 million.

The group’s average effective tax rate in the nine-month financial period ended Sept 30, was higher than the 24% corporate tax rate as a result of the non-deductible expenses and prosperity tax.

Quarterly revenue grew by 8.78% to RM666.9 million, against RM613.02 million, driven by a 4.9% increase in volume as the market continued to return to normalcy following the reopening of the economy.

Earnings per share (EPS) came in lower to 26.4 sen per share, from 27.6 sen per share a year before.

The group declared a third interim dividend of 25 sen per share — payable Nov 18 — bringing the total declared to 67 sen so far this year. The third interim dividend amounting to RM71.38 million represents 95% payout ratio.

For the first nine months of FY2022 (9MFY22), net profit fell 5.9% to RM200.79 million against RM213.4 million a year earlier while revenue for the same period increased 2.9% to RM1.83 billion, from the RM1.78 billion registered a year ago.

In a separate statement, BAT Malaysia managing director Nedal Salem said the company will continue to emphasise tobacco harm reduction.

“BAT Malaysia is particularly optimistic and is working with the relevant government stakeholders in its drive towards reducing the tobacco black market in Malaysia, in tandem with the government’s announcement to introduce new measures to address the high level of cigarette smuggling in Malaysia.

“However, we believe these enforcement initiatives must be accompanied by measures to address affordability pressures for consumers. The company will continue its particular emphasis on tobacco harm reduction,” he added.

On Thursday, BAT Malaysia’s share price gained 16 sen to RM10.52, valuing the group at RM2.99 billion.