BAT shares lose 8% after the company announced a write-off of 25 billion pounds – Kommersant

The tobacco concern British American Tobacco (BAT) has published updated forecasts (.pdf) based on the results of the current financial year, in particular indicating that it will write off about £25 billion ($31.5 billion) due to a decrease in the value of a number of American brands in its portfolio. BAT cited problems in the American market, where, amid high inflation, consumers are switching to cheaper brands of cigarettes. In addition, the circulation of already banned disposable vapes, which are crowding out traditional tobacco products, is growing in the United States.

The manufacturer noted that the cost reduction affected brands such as Newport, Camel, Pall Mall, Natural American Spirit. In calculating the write-down amount, the company estimated “the carrying amount and useful life of approximately 30 years.” The company’s shares reacted to management’s announcement by falling almost 8% during morning trading on the London Stock Exchange, reducing the value of BAT by £4 billion.

As for its fiscal year outlook, BAT management, without giving specific figures, said earnings per share will be in line with guidance and sales in the e-cigarette and vaping category will continue to show strong growth. By 2035, BAT is expected to generate 50% of its revenue from non-combustible tobacco products. Additionally, the company expects continued challenges in the U.S. market due to macroeconomic pressures and a lack of regulatory action regarding illicit sales of disposable vapes.

How BAT’s assets in Russia were transferred to a company from Abu Dhabi, read in material “Ъ”.

Alena Miklashevskaya