High depreciation on some US cigarette brands caused British American Tobacco (BAT) to lose billions in 2023.
But that wasn’t surprising after a corresponding announcement at the end of last year. The share price rose. What was positively received by investors was that the company is looking for ways to monetize at least part of its stake in the Indian conglomerate ITC. Work is underway to meet the regulatory requirements, BAT announced on Thursday in London during the presentation of the balance sheet.
The planned sale of at least part of the 14.7 billion pounds (17.2 billion euros) stake is the focus of investors, wrote analyst James Edwardes Jones from the Canadian bank RBC in an initial assessment. The money could be used to reduce debt and could be beneficial for share buybacks. The business figures for 2023 are now largely in line with expectations and the annual outlook has been known since December anyway.
The bottom line is that shareholders suffered a loss of 14.4 billion British pounds in 2023 after a surplus of 6.7 billion a year earlier, the company also announced.
The company also increased a special write-down, which primarily affects some of its US cigarette brands, to 27.6 billion pounds. That’s a good 2 billion more than announced in December. With the value adjustment, the group, which has brands such as Lucky Strike in its range, responded to falling demand. More and more smokers are quitting and switching to tobacco-free alternatives or cheaper brands.
In 2023, sales fell slightly by a good one percent year-on-year to 27.3 billion pounds. Based on constant exchange rates, this results in an increase of a good 3 percent. The driver was the business with tobacco-free alternatives such as e-cigarettes, which grew by a good fifth on its own.
In the new year, internal sales should grow at the lower end of the medium-term forecast range of three to five percent, as was already said in December.
The dividend is now expected to rise by two percent to just under 236 pence per share. The share price rose by six percent to 2,459 pence at the top of the currency-mixed Stoxx Europe 50 by Thursday afternoon. This means that there is now an increase of around seven percent on the price list in 2024, after the shares had collapsed by more than a quarter in 2023.
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LONDON (dpa-AFX)
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