The cigarette manufacturer has reported a two per cent increase in profit before tax to Sh4.4 billion for the six months ended June 30, 2026, up from Sh4.3 billion a year earlier British American Tobacco (BAT) Kenya has posted a modest rise in half-year profit after a recovery in export sales offset weaker demand in the domestic market, where rampant illicit cigarette trade continues to erode sales.
The cigarette manufacturer has reported a two per cent increase in profit before tax to Sh4.4 billion for the six months ended June 30, 2026, up from Sh4.3 billion a year earlier. Net revenue grew five per cent per cent to Sh12.3 billion, driven by higher export sales and growing demand for its modern oral nicotine pouches launched in June last year.
The board also declared an interim dividend of Sh10 per share, maintaining shareholder returns despite rising operating costs and a difficult trading environment. The results come as BAT Kenya grapples with declining cigarette volumes in the local market amid reduced consumer spending, inflationary pressures and the continued expansion of the illicit tobacco trade.
The company's cost of operations increased by seven per cent to Sh8 billion, reflecting higher raw material costs, compliance expenses related to graphic health warning regulations and investments to support its expanding portfolio of nicotine products. Despite the increase in costs, operating profit edged up by one per cent to Sh4.3 billion, supported by revenue growth and productivity gains from operational efficiencies.
BAT Kenya managing director Sidney Wafula said the company had demonstrated resilience despite mounting challenges facing the tobacco industry. "Despite a challenging operating environment marked by the continued rise in illicit cigarette trade, the company delivered resilient performance during this period.
These results reflect the agility of our business in navigating an increasingly complex and dynamic environment," he said. Wafula identified illicit cigarette trade as the biggest threat to the sustainability of the legal tobacco industry, saying illegal products now account for about 45 per cent of the Kenyan market, based on third-party research conducted at the end of 2025.
He said the growth in illicit trade is depriving the government of an estimated Sh12 billion in tax revenue annually, while undermining legitimate manufacturers and their supply chains.