PETALING JAYA: British American Tobacco (Malaysia) Bhd (BAT) will still be giving out high dividends to shareholders this year despite it being a challenging year, chairman Tan Sri Abu Talib Othman said yesterday.“We will still maintain our over 90 per cent dividend payout. We want to give as much money to our shareholders,” he told a press conference held in conjunction with the company’s annual general meeting (AGM) earlier yesterday.
The AGM passed the recommended final dividend of 62 sen net per share, bringing the total dividend for financial year ended Dec 31, 2009, to 236 sen per share, representing a payout of 90.2 per cent of profit attributable to shareholders.
Moving into 2010, BAT anticipated further challenges in the operating environment with continued high levels of smuggled cigarettes and regulatory changes being introduced.
However, Abu Talib said the company had lined up its strategies to meet all the uncertain conditions arising from, among others, the implementation of the Asean Free Trade Area (AFTA), the rapid growth of illicit cigarette trade and the removal of packs less than 20 sticks.
Citing an example, he said the sharp increase in the level of illicit cigarettes last year had resulted in an 11.2 per cent decline in total industry volume but the situation was now been under control with actions taken by the authorities to curb smuggling.
Despite the trading pressure, its Global Drive Brands market share grew by 2.6 per cent to 54.6 per cent in 2009, driven by the strong performance of ‘Dunhill’ and the relaunch of ‘Kent’.
In the last quarter of 2009, Dunhill introduced its new pack design with a resealable feature called Reloc which was expected to strengthen its premium segment position.
Finance director Stephen James Rush said he hoped customers would still stick to its brands despite the implementation of regulation requiring withdrawal of packs with less than 20 sticks effective June 1, 2010.
As its 14-stick pack was at a price premium over the 20-stick pack, Rush said the removal of the smaller packs would see the company losing as much as RM80 million within a year.
“But we have other plans to address this regulation thing. We have our strategy in launching Dunhill in 20-stick pack. That is our key cornerstone in convincing Dunhill ‘14’ customers not to change brand,” he said.
Rush said the company would continue to focus on its premium brands to maximise profit growth.
On the company’s commitment to the carbon footprint issue, he said BAT had among others, planted 6,000 hectares of trees in Ulu Tungud, Sabah, besides being conscious about the carbon emissions in its processes. — Bernama