NAIROBI, Kenya- BAT Kenya has reported an 18 percent increase in profit before tax for the year ended 31 December 2025, demonstrating resilience despite a challenging operating environment marked by a sharp rise in illicit cigarette trade.
Profit before tax rose to Sh7.7 billion, up from Sh6.5 billion in 2024.
However, net revenue declined by 10 percent to Sh23.2 billion, down from Sh25.7 billion, largely due to the growing dominance of illicit cigarettes in the domestic market.
Total operating costs fell by 15 percent to Sh15.7 billion, reflecting lower sales volumes, disciplined cost management, and productivity initiatives implemented during the year.
The company also recorded a finance income of Sh0.2 billion, a notable turnaround from an exchange loss of Sh 0.8 billion in the previous year, supported by the stability of the Kenyan shilling against the US dollar and prudent cash management.
Dividend Maintained
Despite market pressures, BAT Kenya maintained its strong dividend position.
The Board has proposed a final dividend of Sh60 per share, bringing the total dividend for the year to Sh 70 per share, including the interim payout.
The proposal will be presented for approval at the Annual General Meeting scheduled for 12 June 2026.
Illicit Trade Now 45pc of Market
Managing Director Crispin Achola said illicit cigarette trade now accounts for 45 percent of the domestic market, up from 37 percent in 2024, citing third-party research.
He warned that the surge in illicit products is costing the government an estimated Sh12 billion annually in lost revenue.
“Despite elevated levels of illicit cigarettes, the company delivered strong underlying performance,” Achola said, noting that export sales, which account for about half of total revenue, remained stable.
He also cited the relaunch of oral nicotine pouches in the second half of 2025 as a revenue support factor.
Profitability was further strengthened by currency stability and proactive cost management, which offset inflationary pressures.
Call for Stronger Enforcement
Achola called for urgent and coordinated enforcement action, including stronger border controls, enhanced market surveillance, tougher penalties for offenders and improved inter-agency collaboration.
“The scale and acceleration of this challenge requires sustained enforcement to dismantle illicit supply networks, restore market integrity and safeguard critical fiscal revenues,” he said.
BAT Kenya reaffirmed its commitment to working with government agencies to combat illicit trade while advancing its strategy of promoting reduced-risk alternatives under its “A Better Tomorrow™” agenda.
