BAT Kenya profit rises 2% to Ksh.4.4 Billion amid illicit trade pressure
BAT Kenya reported a 2% profit increase to Ksh.4.4 billion, driven by strong export sales and new nicotine pouch products. Despite this, the company faces significant challenges from illicit trade and reduced consumer purchasing power due to inflation.
Why it matters
The report highlights the economic impact of illicit trade on government tax revenue and the resilience of consumer goods companies in volatile emerging markets.
The tobacco manufacturer reported profit before tax of Ksh.4.4 billion, up from Ksh.4.3 billion recorded in the corresponding period last year. Net revenue rose by 5 per cent to Ksh.12.3 billion, supported by a recovery in export sales and continued growth in oral nicotine pouch sales following the product's launch in June 2025.
The improved revenue performance helped cushion the impact of declining domestic cigarette sales as consumers grappled with inflationary pressures and reduced disposable incomes.
However, total operating costs increased by 7 per cent to Ksh.8.0 billion, driven by higher input costs, additional compliance expenses related to graphic health warning regulations and investments in the company's expanding multi-category product portfolio.
As a result, operating profit grew marginally by 1 per cent to KSh4.3 billion, with productivity gains and operational efficiencies helping offset the higher costs.
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