British American Tobacco Releases Half Year Summary Report: New Tobacco Contributes £ 201 million in Profit, with Operating Profit Growth of 61.4%

British American Tobacco (BAT) released its semi annual performance report, with revenue growth of 4.4% in the first six months ended June 30, 2023, and excellent performance of the new tobacco industry; Non combustible product revenue accounts for 16.6% of the group's total revenue; The reported operating profit increased by 61.4%. The financial performance of the new tobacco has significantly improved, contributing £ 201 million to the group's profits, and it is planned to achieve the profit target of this business by 2024.
Strong performance of new tobacco
BAT pointed out in its report that its atomized e-cigarette brands Vuse and Velo, both of which have continued to generate strong revenue growth. At the same time, the launch of the heated non combustible product glo Hyper X2 Air lays the foundation for future innovation. The new type of tobacco contributed approximately £ 201 million in increased profits.
BAT stated that its investment in non combustible products is gradually taking effect and is currently very close to breaking even, with the number of users of non combustible products increasing by 1.5 million compared to last year. But it also pointed out that the progress of heating tobacco products requires more efforts.
BAT's revenue, operating profit, and revenue have all achieved growth. In the US combustion tobacco market, the company achieved gradual improvement in performance in the first half of 2023, especially in the high-end tobacco product field.
Revenue, operating profit, and profitability are all growing
BAT CEO Tadeu Marroco stated that despite facing a complex external environment, he is satisfied with the company's resilient performance and the new vitality within the organization in the first half of 2023.
The new type of tobacco is playing an increasingly important role in performance, with revenue increasing by 29% year-on-year and non combustible product users increasing by 1.5 million compared to last year. He is confident in his future contributions and is expected to achieve positive growth in 2024. At the same time, he also stated that the US market still needs to strengthen its attention, but the gradual improvement in high-end tobacco business performance since 2023 is encouraging.
BAT stated that it is actively addressing challenges, enhancing strategic capabilities through management restructuring, and further consolidating a culture of cooperation and inclusiveness. BAT will continue to be committed to sustainable development, promoting full value chain cooperation, and achieving sustainable goals, including three types of emissions and biodiversity.
Previously, BAT shareholders expressed disappointment at its slow transition to e-cigarettes and other low-risk products.