BAT Bangladesh: BATBC Q2 CY23 :: Flat earnings growth

In Q2 CY23, BATBC reported c22% revenue growth driven by c10% cigarette volume growth, c7% average cigarette price growth and increase in tobacco leaf export. Gross margin fell by 672bps yoy to c50%. Operating profit margin declined by 1,049bps yoy to c40% in this quarter. Gross margin contraction and OPEX rise offset revenue growth and resulted in flat earnings growth.

How did multinational companies perform in Jan-Mar 2023?

* The cumulative profits of Multinational Companies (MNCs), excluding BERGERPBL, increased by c5% yoy in Jan-Mar 2023. * Consumer staple companies experienced continued growth, performing well during the quarter: * MARICO’s profit grew c. 25% this quarter because of profitability improvement driven by lower copra price and opex management * RECKITTBEN resumed topline growth and generated strong earnings growth by trimming operating expenses * All construction companies ...

BAT Bangladesh: Q1 CY23 Earnings Update: c9% yoy NPAT growth driven by...

c9% yoy NPAT growth in Q1 CY23. NPAT increased by c9% yoy to BDT 4,563mn in Q1 CY’23 from BDT 4,169mn in Q1 CY’22. Earnings growth was mainly driven by c16% revenue growth. EPS stood at BDT 8.44 in Q1 CY’23 against BDT 7.73 in Q1 CY’22. c16% yoy revenue growth driven by volume growth. In Q1 CY'23, net revenue stood at BDT 22,684mn against BDT 19,530mn in Q1 CY'22, which indicates a 16% yoy revenue growth. Domestic revenue grew by c14%, driven by a c11% volume increase and c3% price hike. Expo...

BAT Bangladesh: IDLC-SL Research: BATBC Q4 CY22 Earnings Update

c36% yoy NPAT growth in Q4 CY22; CY22 profit rose by 19% yoy. NPAT increased by 36% to BDT 4,632 million in Q4 CY'22 from BDT 3,315 million in Q4 CY'21. Annual EPS stood at BDT 33.10 in CY’22 against BDT 27.72 in CY’21. BDT 20/share for CY22; payout declined from CY21. The previous year's dividend per share was BDT 27.5 (payout ratio of 99%). YOY dividend per share declined c27% in CY’22.

BAT Bangladesh: Q3'22: 39% yoy NPAT growth due to increase in cigarett...

* 39.4% NPAT growth in Q3 CY22; 9M profit increased by 13.6% yoy. Major reasons are 38% growth in revenue. EPS in Q3 22 stood at BDT 7.60 against BDT 5.45 in Q3 21. In 9M 2022, EPS stood at BDT 24.5 against BDT 21.58 in 9M 21. * Upstanding revenue performance driven by volume growth. Domestic revenue grew by 27% driven by 22% volume increase and 5% price hike. Export revenue from tobacco leaf sales grew by 523.4%, reaching c10% of Q3 CY22 sales. Growth in domestic cigarette volume may ...

BAT Bangladesh: c8% yoy NPAT growth despite c15% yoy sales growth in Q...

Q3 21 EPS stood at BDT5.5 vs 5.0 in Q3 20, implying c8% yoy earnings growth. It was c9% below our expectations. The sales growth could not translate to profit growth because of higher opex and high deferred tax expenses. During 9M 21, EPS stood at BDT21.1 vs BDT16.2 in 9M 20, implying c31% yoy growth. Q3 21 revenue grew by c15% yoy driven by c8% yoy volume growth and c6% price growth of tobacco products. During the 9M 21, volume growth stood at c17% yoy. The major reason of such substantial v...

BAT Bangladesh: Lower opex, interest and tax expenses led to c2% NPAT ...

Q3 20 EPS stood at BDT15.1 vs 14.8 in Q3 19, implying c2% earnings growth. It was as per our expectation. During 9M 20, EPS stood at BDT48.5 vs BDT36.0 in 9M 19, implying 35% yoy growth. Please note that this significant earnings growth in the 9M 2020 was driven by a gain in market share and strong opex control amid the pandemic. Q3 20 revenue declined by c16% yoy driven by a decline in tobacco sales by c11% yoy (4% volume, 7% average price) and decline in tobacco leaf export sales by c78% yo...

BAT Bangladesh: Market share gain amid pandemic; upgrade to Buy

BATBC has gained market share during the pandemic though cigarette consumption has decreased during the pandemic. There are two main reasons. * First, the market share of illicit manufacturing has reduced from c10% in 2019 to below c7% in 2020. The main reason is the illicit manufacturers could not source raw material (tobacco leaves) during the pandemic. Also, their distribution channel interrupted during the lockdown. In the post-lockdown period, the National Bureau of Revenue (NBR) contin...

BAT Bangladesh: 12% yoy volume dent in Q2 20; cost deferral leads to s...

BDT16.5 EPS in Q2 20 implies c70% yoy growth over BDT9.7 in Q2 19. The earnings declaration beat our expectation of BDT8.0 by a huge margin. The main reason is a surprisingly low level of operating expenses, resulting from the deferral of costs. We estimate that the number of discretionary costs was BDT1,500mn for the quarter, considering normalized opex to sales ratio. If normalized, the EPS of the company would be BDT7.9 in Q2 20 (similar to our expectation) and BDT24.8 in 1H 20, suggesting...

BAT Bangladesh: Q1 20 earnings generated 47% yoy gain driven by 32% yo...

Q1 20 earnings surpassed our expectation by c13%. EPS in Q1 20 stood at BDT16.9 against BDT11.4 in Q1 19, implying c47% yoy growth. The Q1 earnings beat our expectation of BDT15.0 due to significant cigarette volume growth. Two reasons why Q1 20 revenue grew by c48% yoy. During the quarter, BAT Bangladesh (BATB) sold 16.7bn sticks of cigarette in the domestic market, implying c32% yoy growth in volume. The growth in volume surpassed our expectation by c11%. There are two reasons why BATB show...

BAT Bangladesh: Post-budget review – Rise in tariff lower than expec...

The average tariff hike in the budget is c6% compared to our expectation of c11%. Since the tobacco sector is the largest contributor of the government’s revenue (c12% of total revenue collection) and the government is likely to require fund for fiscal stimulus, we expected c11% average increase in cigarette tariffs (c21% for the low segment) during this budget, followed by an increase in illegal market share from 10% to 15% in FY21. However, the current budget declaration comes as a relief s....

Impact assessment of proposed regulatory changes on British American T...

Bangladesh consumers: Expect increase in economic activities from July

The long ‘Holiday’ hits the season of the largest retail sales. Bangladesh identified the first Covid-19 patient on 8 March and has reported 25,121 confirmed cases, 370 deaths, and 4,993 recoveries till 19th May 2020. Bangladesh is set to experience a 66-day long ‘holiday’ till 30th May, comprising of 38 days of general holiday (i.e. lockdowns), 20 weekends, and 8 public holidays. The supply-side experienced distribution challenges from the law enforcement agency during the first two wee...

Equity Valuation Report on British American Tobacco Bangladesh Company...

BAT Bangladesh (BATBC), a part of British American Tobacco plc, is the leading tobacco manufacturing and distribution company having approximately two-third of the total tobacco market in Bangladesh. BATBC is serving the market with different categories of tobacco products to cater to the demand from consumers across different income level.  BATBC has recorded lucrative 17.5% CAGR in gross revenue over the past 7 years. During the preceding 7 years CAGR of volume sales of the company was 11.74%....

Equity Insight on British American Tobacco Bangladesh Company Ltd.

BAT (British American Tobacco) Bangladesh, a part of BAT plc (leading global tobacco group), manufactures and markets different brands of tobacco products in Bangladesh. BATBC manufactures and sales tobacco products in Bangladesh. The company also exports unmanufactured tobacco to various countries. It conducts its business in four segments.