Shareholders of British American Tobacco Uganda Limited (BAT Uganda) ratified a total of Ushs 19.9 billion, as a first and final dividend for the year ended 31st December 2020.
This was revealed by BAT Uganda Managing Director, Kirunda Magoola during the company’s media briefing that followed their 21st Annual General Meeting held virtually on 27th May, 2021.
According to Magoola, the dividend, which is in line with the company’s 100% dividend pay-out policy and translates to Ushs 406 per share, will be paid net of withholding tax on 21st June 2021.
Despite a challenging business environment, impacted by the effects of the global COVID-19 pandemic, BAT Uganda remained resilient in 2020.
The company’s profit from operations increased by 30% to Ushs 29.1 billion, attributable to steps taken to optimise pricing strategies, an improved product mix and efficient cost reduction.
Profit after tax also increased by 27% to Ushs. 20 billion.
However, the company’s gross revenue fell by 1% to Ush 162 billion attributed to a 9% reduction in gross sales, reflecting the impact of COVID-19 on the purchasing power of consumers and their migration to illicit product.
Magoola decried the current operating environment which he said has become increasingly unfavorable on the back of illicit trade.
“There is now widespread distribution of tax-evaded and unregulated product, which typically, do not bear the graphic health warning required by Tobacco Control Regulations (TCR) that came into force at the beginning of the year” Magoola said.
He added that irregularities in enforcement by authorities on graphic health warnings, has created the perfect opportunity for traditional tax-evaded illicit products to pass as genuine product, impacting the fiscus.
“The impact of illicit trade was reflected in BAT Uganda’s 2020 results where total contribution to Government revenues reduced by 5% to Ushs 91 billion, reflecting a decrease in Excise Duty and Value Added Tax (VAT) as a result of lower sales volumes. It is also estimated that Illicit trade in cigarettes denies the Government approximately Ushs 30 billion in revenue annually”
Magoola thus called upon the Government to urgently ramp up enforcement of the TCR to ensure a fully compliant operating environment in the tobacco industry, and to facilitate URA’s clamp down on tax evaded product.
“We believe that a stable regulatory and fiscal environment is crucial for sustainable business and economic growth. Thus, whilst we acknowledge, applaud and support the Government of Uganda for the various measures taken to address the economic impacts of the pandemic, we reiterate the call by various concerned parties, and Ugandan citizens, for the Government to swiftly enforce across the industry, implementation of the graphic health warning requirements, as prescribed by the Tobacco Control Act 2019”- Magoola urged.
Magoola said, as BAT Uganda, they are committed to continued contribution to Uganda’s socio-economic development which includes through partnerships with over 30,000 Ugandans in the Company’s value chain and remittance of significant tax revenues to the Government.
“I am proud of the work that the team has done and commend BAT Uganda for its resilience to deliver strong business results in 2020. Through our diverse strengths – our strong heritage, our strong brands, our new product innovations and our talented people, I believe that we are well poised to deliver our ambition to build A Better Tomorrow; for consumers, society, employees and shareholders.”- Magoola remarked.