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British American Tobacco PLC on Thursday said it was committed to dividend growth as it reported a swing to a loss amid a decline in revenue.
BAT shares rose 5.3% to 2,442.00 pence each on Thursday morning in London, while in Johannesburg, shares traded 4.0% higher at R 579.53 each.
The London-based maker of cigarettes and vapes said revenue fell 1.3% to £27.28 billion in 2023 from £27.66 billion in 2022.
The company swung to a pretax loss of £17.06 billion from a profit of £9.32 billion a year prior.
Notably, depreciation, amortisation and impairment costs ballooned to £28.61 billion from £1.31 billion. BAT explained that the depreciation costs include a non-cash impairment charge of £27.3 billion, mainly relating to its acquired US combustible brands.
Despite the figures, BAT declared a total dividend of 235.52 pence per share for 2023, up 2.0% from 230.9p a year prior.
Looking ahead, Chief Executive Tadeu Marroco said: ‘We are investing to strengthen our US business, accelerate innovation momentum, and enhance capabilities that support our strategic delivery. We expect these investments, together with the US macro-economic pressures, will impact 2024. Thereafter, we will progressively build to deliver 3-5% organic revenue, and mid-single digit adjusted organic profit from operations growth by 2026 on a constant currency basis. We are committed to continuing to reward shareholders with strong cash returns throughout this period.’
Further, BAT expects the global tobacco industry volume to fall by 3% in 2024, mainly due to the US and Indonesia.
BAT emphasised that it was committed to dividend growth in sterling terms.
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