Russia Exit Hits BAT Profits

Industry Insight
Jul.28.2022

BAT took a £957 million ($1.15 billion) impairment charge related to the transfer of its Russian business, lowering its half-year earnings by a quarter.

Russia Exit Hits BAT Profits

The London-based firm, which controlled almost a fourth of the Russian market, said earlier this year that it was in advanced talks with its distributor in the country to sell the business in the wake of Russia’s invasion of Ukraine.

 

BAT reported a 25 percent drop in profit from operations on a reported basis to £3.68 billion for the six months to June 30 as a result of the charge. The company expects global tobacco industry volume to be down about 3 percent, partly because of the Russia-Ukraine crisis.

 

In a press release announcing the half-year results, BAT emphasized the growth of its New Categories products and the performance of its combustible business, which continues to grow value share enabled by robust pricing.

 

“I am very proud that our continued New Categories growth momentum is driving faster transformation, with revenue growth of 45 percent in the first half of 2022, on top of 51 percent growth in fiscal year 2021,” said BAT CEO Jack Bowles. “I am especially proud that the number of consumers using our noncombustible brands has passed the milestone of 20 million in the first half.”

 

Noncombustible products now represent 14.6 percent of BAT’s revenue.

 

While acknowledging the geopolitical and macroeconomic challenges, Bowles was upbeat about the outlook for BAT.

 

“We are not immune, of course, to the increasing macroeconomic pressures, exacerbated by the conflict in Ukraine,” he said. “However, we are well positioned to navigate the current turbulent environment due to our powerful brands, operational agility and continued strong cash generation.”

 

The content excerpted or reproduced in this article comes from a third-party, and the copyright belongs to the original media and author. If any infringement is found, please contact us to delete it. Any entity or individual wishing to forward the information, please contact the author and refrain from forwarding directly from here.

Australia’s Tobacco Tax Debate Intensifies as One Nation’s Barnaby Joyce Warns of Illicit Market Growth
Australia’s Tobacco Tax Debate Intensifies as One Nation’s Barnaby Joyce Warns of Illicit Market Growth
Australian One Nation MP Barnaby Joyce has criticised continued tobacco excise increases, arguing that higher taxes are driving consumers toward illicit tobacco markets and benefiting organised crime groups.
Regulations
Jul.13 by 2Firsts Perspectives
Vape Vending Machine Concerns Rise in German-Speaking Europe as Schools and Age Checks Come Into Focus
Vape Vending Machine Concerns Rise in German-Speaking Europe as Schools and Age Checks Come Into Focus
Recent reports from Germany and Switzerland show growing concern over vape and tobacco vending machines near schools or in public settings, with parents, teachers and residents questioning youth access, age-verification controls and the sale of vapes alongside snacks and drinks.
Jul.06
Argentina Updates Health Warning Rules to Include Vapes and Nicotine Pouches
Argentina Updates Health Warning Rules to Include Vapes and Nicotine Pouches
Argentina’s Ministry of Health has updated its health warning rules for tobacco and nicotine products, adding e-cigarettes, vapes, heated tobacco products, sticks and nicotine pouches to mandatory warning requirements.
Jul.08
CCPIT Says Trade Friction Index for China-Related Electronics Sector Remains High, With Vape Products Among Areas of Focus
CCPIT Says Trade Friction Index for China-Related Electronics Sector Remains High, With Vape Products Among Areas of Focus
China Council for the Promotion of International Trade (CCPIT) held its July regular press conference on July 31, 2026, releasing the May 2026 Global Economic and Trade Friction Index. CCPIT spokesperson Yang Fan said the global trade friction index stood at 95 in May, remaining at a medium-to-high level. By industry, the electronics sector recorded the highest trade friction index among 13 monitored industries. In China-related trade frictions, the index stood at 93, with electronics products including drones, chips and vape products among areas where friction remained elevated.
Aug.03
UK PM Andy Burnham Reshapes Vape Retail Rules as Licensing Could Raise Barriers for New Shops
UK PM Andy Burnham Reshapes Vape Retail Rules as Licensing Could Raise Barriers for New Shops
UK Prime Minister Andy Burnham is pushing a high street reform agenda that could give local authorities greater powers over commercial activity, including vape retail. The reforms could involve expanded planning powers and a potential vape retail licensing system, allowing councils to play a larger role in store locations and market access. The measures are part of the UK’s broader shift toward tighter vape regulation, although no nationwide vape retail restrictions have yet been implemented.
Aug.11
Iowa Enforces Vape Registry Law as Retailers Warn Product Limits Could Increase Store Pressure
Iowa Enforces Vape Registry Law as Retailers Warn Product Limits Could Increase Store Pressure
Iowa has begun enforcing its vape registry law, requiring vape products to be registered before they can be legally sold in the state. The move follows a decision by the U.S. Court of Appeals for the Eighth Circuit to lift an injunction that had blocked enforcement. Retailers have warned that tighter product availability rules could increase pressure on vape shops. One Iowa retailer said that if only a limited number of products remain available, many stores could face significant business challenges.
Aug.06