British American Tobacco Uganda has recorded a 14% increase in net profit to Shs3.9bn for the half year period ended June 30.
Results released on Aug. 5 shows that the company’s gross revenue grew by 12% to Shs 50.7bn as a result of an increase in sales volume and product mix compared to the same period last year.
Net revenues increased by 14% to Shs25bn as taxes to government increased by Shs2.5bilion to Shs27.4bn during the same period under review.
Nicholas Ecimu, the company secretary said while economic activities increased in the first quarter of this year as a result of lifting of the covid-19 restrictions, the soaring fuel and commodity prices continue to strain consumer disposable income, negatively impacting the trading environment.
He said, illicit trade in tax evaded cigarettes remains their key challenge to the tobacco industry. “The prevalence of tax evaded illicit cigarettes in the market has persisted due to their significantly lower prices and the lack of enforcement of packaging and labeling requirements in the Tobacco Control Act 2015 and Tobacco Control regulations 2019,” he said.
“We urge the relevant authorities to ramp up enforcement against illicit and target products that do not comply with the packaging and labeling requirements of TCA and TCR as well as rooting out flows of illicit products from source and to the border points.”
Last year, the cigarette firm recorded a sharp drop in net profit to Shs10.2billion last year to Shs 19.9billion citing slow economic recovery and increased incidences of trade in illicit cigarettes.