Kampala, Uganda – British American Tobacco Uganda (BAT Uganda) has reported a sharp decline in sales revenue for the first half of 2025, highlighting the mounting challenges facing the tobacco sector. Gross revenue slid by Shs 6.1 billion to Shs 33.5 billion, down from Shs 39.6 billion in the same period last year, while net revenue plunged 34% to Shs 18.4 billion due to falling volumes and rising excise taxes.
The company attributes the slump largely to the surge in illicit cigarette trade, which now makes up 37% of Uganda’s market, depriving both the industry and the government of critical revenue. BAT Uganda estimates that contraband sales cost the government approximately Shs 2.5 billion annually.
Despite the decline in revenue, BAT Uganda recorded a profit before tax of Shs 5.4 billion, nearly matching last year’s Shs 5.5 billion, thanks to strict cost management that reduced operating expenses by 16% to Shs 12.8 billion. Tax contributions remained substantial, with Shs 18.9 billion remitted in excise duty, VAT, and other levies, though after-tax profit fell to Shs 3.8 billion from Shs 4.5 billion in 2024.
The company did not declare an interim dividend, choosing to conserve resources amid a challenging market. BAT Uganda has signaled its commitment to regulatory compliance, strategic cost discipline, and partnerships with government agencies to combat smuggling and restore legitimate market growth.
The performance serves as a stark reminder of the impact of illicit trade and economic pressures on businesses and government revenue, underscoring the urgent need for coordinated efforts to safeguard Uganda’s legal tobacco market.