British American Tobacco Bangladesh Company Limited (BATBC), one of the country’s leading multinational corporations, has reported a decline in profits during the first quarter of 2025 (January–March). According to the company’s latest financial disclosures, the consolidated earnings per share (EPS) stood at Tk 5.89 during this period, a noticeable drop from Tk 7.65 recorded in the same quarter of the previous fiscal year. This reduction in profit reflects growing concerns regarding operational performance, regulatory pressures, and shifting consumer trends affecting the tobacco industry in Bangladesh.
Negative Operating Cash Flow Raises Concerns
As per the quarterly statement disclosed on the Dhaka Stock Exchange (DSE) website following a recent board meeting, BATBC also reported a decrease in its net operating cash flow per share, which has gone into negative territory. The figure currently stands at negative Tk 17.62. This suggests that the company spent significantly more cash on its operations than it generated during the period. On the other hand, the net asset value per share (NAVPS) as of March 31, 2025, remained comparatively stable at Tk 97.77, reflecting the company’s strong asset base despite ongoing operational challenges.
Falling Sales and Rising Taxes Behind the Decline
The DSE announcement clarified that the primary reason behind the decline in quarterly profit was a drop in product sales. This decrease in sales revenue, combined with a substantial increase in excise duties and taxes, has significantly affected the company’s net income. Furthermore, a slowdown in receivables collection has exacerbated the situation, contributing to the sharp fall in operating cash flow. These developments suggest that BATBC is currently navigating a more challenging business environment compared to previous years, marked by stricter regulations, changing market dynamics, and possibly a shift in consumer behavior.
Read More: Harvard vs. Trump Administration: A Legal Battle Over Research Funding
Consistent Dividends Despite Lower Annual Profit
Despite the current dip in profit and cash flow, BATBC maintained its reputation as a generous dividend-paying company. For the financial year ending December 31, 2024, the company declared a 300% cash dividend, a level that remains attractive to investors. However, annual profitability also showed a slight downward trend. In the fiscal year 2024, the company posted an EPS of Tk 32.42, compared to Tk 33.11 in 2023, signaling that this is not an isolated quarterly event but part of a gradual decline in net profitability. Even with these setbacks, the company’s continued high dividend payouts demonstrate its commitment to rewarding shareholders and maintaining investor confidence.
Share Price Volatility Reflects Market Sentiment
The performance of BATBC in the stock market over the last year has also shown significant variation. According to official data, the highest price of BATBC shares was Tk 450, while the lowest price during the same period fell to Tk 259. This volatility mirrors the uncertainty investors may be feeling in response to the company’s financial performance and the overall regulatory environment. Historically, the company has been a strong performer in terms of dividend distribution, having declared 100% cash dividend in 2023, 200% in 2022, 275% in 2021, and a remarkable 600% in 2020.
Overall, while BATBC continues to remain one of the most financially resilient and influential companies in Bangladesh’s corporate sector, the latest financial indicators suggest a phase of adjustment and recalibration. The declining sales figures, negative cash flow, and rising operating costs pose clear challenges to its traditional growth model. In light of growing public health campaigns, changing legal frameworks, and evolving consumer awareness regarding tobacco use, the company may need to explore strategic innovations and cost efficiency measures to sustain its long-term profitability. Stakeholders and investors will be watching closely to see how BATBC adapts to these new market realities and maintains its leadership in the tobacco industry of Bangladesh.
Reference: Prothom ALO
