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Smoker in US casino: BAT is looking for alternatives to the classic cigarette business
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Wayne Parry/AP
The falling cigarette consumption in the USA is causing problems for the tobacco company British American Tobacco (BAT). Because fewer and fewer Americans are turning to conventional cigarettes, BAT had to write down the value of its traditional business in the USA by a good 27 billion pounds, the company announced. This pushed the manufacturer of cigarette brands such as Dunhill and Lucky Strike deep into the red last year: before taxes, the loss was 17 billion pounds - after a profit of 9.3 billion the previous year.
CEO Tadeu Marroco stated that he would continue to invest in the expansion of his business with cigarette alternatives in the USA. The expenses for this would put as much strain on the balance sheet in 2024 as the uncertain economic situation in the USA. “We will then gradually build on this in order to achieve organic sales growth of three to five percent and adjusted organic profit growth in the mid-single-digit range by 2026,” announced Marroco.
Sales increased by 3.1 percent to 27.3 billion pounds. For the current year, the Board of Directors forecast organic growth in the low single-digit percentage range.
The tobacco company also signaled that it might sell part of its stake in Indian conglomerate ITC, boosting investor hopes of a possible share buyback program. BAT shares then rose by more than seven percent on the London Stock Exchange.
mmq/Reuters