Profit Edges Higher
BAT Kenya has posted a modest rise in profit. Profit before tax reached KSh4.4 billion. That was a 2 per cent rise from KSh4.3 billion last year. The results covered the six months to June 30. Net revenue also grew by 5 per cent.
It reached KSh12.3 billion. The growth was supported by stronger export sales. Demand for nicotine pouches also continued to rise.
Domestic Sales Weaken
The gains came as local cigarette sales fell. Consumers have faced higher living costs. Disposable incomes have also remained under pressure. The company said illicit cigarette trade was another major factor. BAT Kenya said illicit sales made up about 45 per cent of the local market by late 2025.
The estimate was based on third-party research. The company said the trade also hurts government revenue. It estimates that about KSh12 billion in tax revenue is lost each year.
Costs Continue to Rise
The company’s costs also increased during the period. Operating expenses rose by 7 per cent. They reached KSh8 billion. Higher input costs were partly blamed. Extra compliance costs were also incurred.
The costs were linked to graphic health warnings. Investment in new products also added to expenses. Operating profit still rose by 1 per cent. It reached KSh4.3 billion.
‘A Challenging Environment’
BAT Kenya’s managing director, Sidney Wafula, said the business had remained resilient.
“Despite a challenging operating environment,” he said, the company had delivered a resilient result.
He pointed to the rise in illicit cigarette trade. Wafula said the trend posed a major threat to legitimate tobacco firms. He also cited weaker consumer purchasing power. Higher fuel costs were said to have added pressure.
Those costs have been linked to wider global tensions and the conflict in the Middle East.
Nicotine Pouches Gain Ground
Modern oral nicotine pouches continued to support sales. The products were launched by BAT Kenya in June 2025. Their contribution to revenue has since increased. Export markets also faced economic and weather challenges.
Currency stability in some key markets offered some relief. The company said exports had nevertheless recovered during the first half of the year.
Dividend Approved
BAT Kenya’s board has also approved an interim dividend. Shareholders will receive KSh10 per share. The dividend applies to the financial year ending December 31, 2026. The move signals the company’s continued focus on returns to investors.
Calls for Action
BAT Kenya said it would continue expanding its smoke-free product range. The company also called for stronger action against illicit cigarettes. It said coordinated enforcement was needed to protect tax revenue.
It also said legitimate firms and their supply chains needed greater protection. The company is now looking to expand its newer products. At the same time, it faces continued pressure in its traditional cigarette business.
The balance between those two markets will remain key to its performance.
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