BAT Kenya maintained an interim dividend of Sh10 per share as its net profit for the six months to June 2026 rose 3.1 percent to Sh3.08 billion on higher export and oral nicotine pouch sales.
The Nairobi Securities Exchange (NSE) listed company’s gross revenue grew by 2.6 percent in the period to Sh18.9 billion, while operating costs rose 6.8 percent to Sh8.02 billion.
Finance income rose to Sh136 million from Sh97 million in the first half of 2025, while income tax expense was slightly lower at Sh1.32 billion, from Sh1.34 billion previously. BAT also collected Sh6.69 billion in excise duty and VAT on behalf of the government, down from Sh6.76 billion a year earlier.
BAT said that sales in its domestic and export markets came under pressure from rising inflation, which cut disposable income, resulting in lower cigarette sales volumes. The company added that higher fuel prices associated with the ongoing conflict in the Middle East increased its logistical and input costs.
The company kept its interim dividend for the half-year period unchanged at Sh10 per share, or Sh1 billion in total. The dividend will be paid on September 25 to shareholders on the company’s books by close of business on August 28.
‘Net revenue increased by five percent to Sh12.3 billion, driven by recovery in export sales and modern oral nicotine pouch sales following the launch in June 2025. This increase offset the impact of lower sales volumes and consumer downtrading in the domestic market,’ said BAT Kenya in a statement.
‘Cost of operations increased by seven percent, mainly driven by higher input costs together with additional expenditure to comply with graphic health warning regulations and support the company’s multi-category product portfolio.’
BAT resumed sale of its oral nicotine pouches in June 2025, after securing the necessary sales licences for the products from the government.
It had introduced the pouches in 2019 -then branded Lyft- as it sought to diversify away from combustible cigarettes. It however stopped selling them a year later after the government said they ought to be regulated as a tobacco product.
In 2024, the company sold the pouch making machinery at its Nairobi factory after lying idle for five years due to the marketing ban, saying that it would rely on imports once it got the nod to bring the pouches back to the market.
The company has also highlighted the impact of an influx of illicit cigarettes in the domestic market.
Citing unnamed third party research, BAT said that illicit cigarettes accounted for 45 percent of the domestic market by the end of 2025, up from 37 percent in 2024, ultimately denying the government Sh12 billion in tax revenue annually.
BAT attributed the surge in illicit products to the lower purchasing power of its customers, which has been forcing them to turn to lower priced alternatives to its products. The company added that although efforts have been made by relevant government agencies to address the illicit trade, enhanced enforcement measures will be required to curb this growing menace.