- British American Tobacco reported an operating loss of £15.8 billion in 2023
- BAT made a £27.3bn write-down on the value of some of its fuel brands
British American Tobacco suffered a pre-tax loss of £17.1bn last year after recording a larger-than-expected impairment charge on its US business.
The maker of Dunhill and Lucky Strike cigarettes reported an operating loss of £15.8bn in 2023, compared with a profit of £10.5bn the previous year.
Two months ago, the group warned it was forecasting a £25bn write-down on the value of some of its US fuel brands amid falling smoking rates and widespread economic pressures.
Download: British American Tobacco said it hopes to complete the sale of its Russian business to its local partner this year
But in annual results published on Thursday, BAT revealed it took a £27.3bn hit from brands, with the rise attributed to currency movements.
Exchange rate headwinds and lower cigarette volumes also contributed to the FTSE 100 company’s overall revenue falling 1.3 per cent to £27.3 billion last year.
But turnover was mainly affected by the transfer of BAT’s Russian and Belarusian businesses last summer to a consortium led by its Russian management team.
However, organic sales grew 3.1 percent at constant exchange rates thanks to strong performance from the company’s “new categories” unit.
Revenue from the Vuse vaping product increased by more than a quarter despite the high prevalence of illicit single-use products across the United States.
Meanwhile, sales of Velo nicotine pouches increased 39 percent thanks to an increase of 3.3 million users and increased average daily consumption in established and expanding markets.
The increase in non-fuel purchases, which now account for around a sixth of BAT’s total revenue, helped the group realize profits from its portfolio of new categories two years ahead of its planned target.
Tadeu Marroco, CEO of BAT, said: “2023 was another year of resilient financial performance and results in line with our guidance, supported by our global footprint and multi-category strategy, despite a challenging macro environment.”
Marroco succeeded Jack Bowles as chief executive last May, having spent more than three decades at the company, including four years as finance chief and a stint as regional director for Europe and North Africa.
For the current year, BAT anticipates “low single-figure” organic growth in sales and adjusted operating profit, with the result weighted toward the second half of the period.
British American Tobacco Shares They rose 6.9 per cent to 2,478.5p on Thursday morning, although they have fallen by around a fifth in the last 12 months.
Neil Shah, chief content and strategy officer at Edison Group, said: “As the sector continues to face increasing regulatory and political headwinds, investors are likely to question their commitment to the stock given the recent underperformance of the stock’s price. BAT shares”.