British American Tobacco Swings to Pretax Loss on U.S. Cigarette Write-Down

By Joe Hoppe

British American Tobacco said it swung to a pretax loss, driven by a previously reported write-down of its U.S. cigarette brands, but backed forecasts for growth in 2024.

The FTSE 100 cigarette maker--which houses the Kent, Dunhill and Lucky Strike brands--said pretax loss for 2023 was 17.06 billion pounds ($21.54 billion) compared with a profit of GBP9.32 billion a year prior. It said the swing was largely driven by an impairment of GBP27.6 billion. Of the impairment, GBP27.3 billion relates to pressure on some of its traditional cigarette brands in the U.S., as it shifts focus to smokeless products, it said.

Adjusted profit from operations edged up to GBP12.465 billion from GBP12.41 billion in 2022. Despite the growth, it skirted under a company-provided consensus forecast of an adjusted operating profit of GBP12.595 billion.

New categories revenue rose to GBP3.35 billion from GBP2.89 billion, missing a forecast of GBP3.46 billion, according to company-provided consensus.

Revenue was GBP27.28 billion compared with GBP27.66 billion, dragged by the sale of its businesses in Russia and Belarus, foreign-exchange pressures and lower cigarette volumes, and partially offset by the increased new categories revenue. Revenue was forecast at GBP27.60 billion, according to consensus provided by the company.

BAT said global tobacco industry volume is expected to decline around 3% in 2024, and it backed prior guidance for low single digit organic revenue and adjusted operating profit growth for the year.

The board declared a dividend of 235.52 pence a share, up from 230.9 pence.

Write to Joe Hoppe at joseph.hoppe@wsj.com

(END) Dow Jones Newswires

February 08, 2024 02:43 ET (07:43 GMT)

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