British American Tobacco has today cut its annual adjusted profit and revenue forecasts, citing the impact of stricter lockdown measures in key emerging markets and a more pronounced hit on sales in countries including Bangladesh and Vietnam.
The world's second-largest tobacco group said growth this year would be slower as coronavirus lockdowns had lasted longer than it anticipated in key markets of South Africa, Mexico and Argentina.
The lockdowns have hit consumption of cigarettes and other tobacco-related products.
The impact has been most notable in South Africa, where a ban on sales of tobacco has continued since March, with no signs of being lifted, the maker of Dunhill and Lucky Strike cigarettes said.
The pandemic also disrupted the company's plans to expand sales of new products, such as e-cigarettes and tobacco heating devices, leading BAT to push its £5 billion sales target for this business to 2025 from 2023/2024 earlier.
These factors led it to revise its global industry cigarette and tobacco heating product volume expectations for the year down to 7% from 5% earlier.
The company said its adjusted revenue growth in constant currencies will now be in the 1% to 3% range for 2020 instead of a previously anticipated low end of a 3% to 5% range.
It added that its adjusted profit per share would also be lower, increasing in the mid-single digit percentage range instead of high-single digits.
BAT said it would not adjust its formula for paying a dividend, sticking to its payout ratio of 65% of profit.
Rival Imperial Brands cuts its fixed dividend by a third to save cash during the coronavirus crisis.
