British American Tobacco Uganda : BAT Uganda Financial Results Half Year 2023

UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2023

The Directors of British American Tobacco Uganda Limited announce the unaudited financial results for the six months ended 30 June 2023 as shown below:

	Gross revenue			Taxes paid					Profit before tax		Cash generated from
	(Ushs)			(Ushs)					(Ushs)		operations (Ushs)
	48.6bn			27.2bn					5.5bn		9bn
	Condensed Statement of Comprehensive Income for the six months		Condensed Statement of Financial Position as at
	ended 30 June
						2022
				2023							30 Jun 2023		31 Dec 2022
				Ushs' m		Ushs' m		Capital and reserves		Ushs' m		Ushs' m
	Gross revenue	48,576		50,671					61		61
	Excise Duty and Value Added Tax	(24,404)		(25,650)				Share capital
					Revaluation surplus		12,687		12,819
	Net revenue	24,172		25,021
					Retained earnings		29,204		25,279
	Total cost of operations	(18,660)		(19,584)
					Shareholders' equity		41,952		38,159
	Profit from operations	5,512		5,437				Non-current liabilities		7,401		7,236
	Finance income/ (costs)	(24)		149				Assets		49,353		45,395
	Profit before tax	5,488		5,586					27,981		28,249
	Income tax expense	(1,695)		(1,713)				Non-current assets
					Working capital
	Profit after tax	3,793		3,873					32,798		28,172
					Current assets
	Total comprehensive income	3,793		3,873				Current liabilities		(11,426)		(11,026)
	Basic and diluted earnings per share (Ushs)	77		79				Net working capital		21,372		17,146
												49,353		45,395

Condensed Statement of Cash Flows for the six months ended 30 June

	2023	2022
	Ushs' m	Ushs' m
Cash generated from operations	9,012	5,399
Net interest paid	-	-
Tax paid	(2,038)	(2,291)
Net cash from operating activities	6,974	3,108
Net cash used in investing activities	-	-
Net cash used in financing activities	(409)	(344)
Movement in cash & cash equivalents	6,565	2,764
At the start of the period	10,533	9,346
Exchange (loss)/gain on cash at bank	(3)	13
At the end of the period	17,095	12,123

Condensed Statement of Changes in Equity

	Share	Revaluation	Retained	Total
	capital	surplus	earnings
	Ushs' m	Ushs' m	Ushs' m	Ushs' m
At 1 January 2022	61	13,083	25,392	38,536
Profit for the year	-	(132)	4,005	3,873
Dividends 2021	-	-	(10,258)	(10,258)
At 30 June 2022
61	12,951	19,139	32,151
At 1 January 2023
61	12,819	25,279	38,159
Profit for the year	-	(132)	3,925	3,793
Dividends 2022	-	-		-
At 30 June 2023	61	12,687	29,204	41,952

The condensed Financial Statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") and in the manner required by Companies Act, 2012 Laws of Uganda.

These standards have been consistently applied to all years presented.

A challenging operating environment

Financial highlights

During the period, business performance was adversely impacted by macro-economic volatility, high inflation, and the high prevalence of illicit trade in tax evaded cigarettes, which led to lower sales volume.

Legitimate industry volume and revenue continued to decline due to Illicit trade estimated at 29% as at the end of 2022 (Source: 3rd party research). Illicit products are characterised by lack of tax stamps, absent or altered graphic health warnings, flavor features and significantly low prices which drive their prevalence. This further impacts the overall economy as it denies the government an estimated Ushs 30 billion in revenue annually.

It is critical that the menace of illicit trade in tax evaded cigarettes is addressed urgently. This will ensure sustainability of legitimate industry and government revenues. We once again call for all relevant authorities to take a multi-agency approach to ramp-up enforcement of tobacco control laws.

Kampala

30 August 2023

Dividend

The Board does not recommend an interim dividend.

Outlook

BAT is on a transformation journey anchored on our purpose to build A Better Tomorrow™ by reducing the health impact of our business. This is underpinned by our Environment, Social and Governance priorities; driving excellence in environmental management, delivering a positive social impact and ensuring robust corporate governance across the business.

Looking ahead, we are confident that our continued investment in the simplification of our business, our consumer-centric brand portfolio and winning culture will enable us to deliver sustainable shareholder value and contribute to the socio-economic growth and development of the country.

By Order of the Board

Paul Mbuga

Company Secretary