BATBC profits rise 29pc

Net profit of British American Tobacco Bangladesh Company increased 29 percent year-on-year in 2014, but its earnings fell short of estimates made by a securities analyst firm.

In 2014, BATBC made net profits of Tk 628.19 crore with earnings per share of Tk 104.70, up from Tk 486.86 crore with an EPS of Tk 81.14 a year ago, according to the website of Dhaka Stock Exchange.

The earnings slightly fell short of expectation as the company's sales remained weak in the third quarter of 2014 after the announcement of cigarette price hike in the national budget for 2014-15, said BRAC-EPL.

Customers typically consume less cigarettes or temporarily shift to a cheaper brand or segment for a short period after such budgetary price hikes, the stockbroker said.

However, the company's sales picked up significantly in the October-December period of 2014 with 32 percent of its total earnings coming from this quarter alone, BRAC-EPL said.

“We expect that such earnings growth during the fourth quarter is driven by higher sales volume as well as price growth-led operating margin improvement.”

On Thursday, BATBC recommended 450 percent final cash dividends in addition to 100 percent interim cash dividends for 2014, down from 620 percent in 2013.

Net asset value per share of the company that got listed on the stockmarket in 1977 stood at Tk 191.06 at the end of 2014, rising from Tk 148.36 a year ago.

The financial disclosures, however, failed to meet investors' expectations, and the company's share prices declined by more than 2 percent yesterday compared with its prices on Thursday.

On the premier bourse yesterday, each BATBC share was traded at between Tk 2,800 and Tk 2,984, before closing at Tk 2,915.