British American Tobacco (BAT) reduced its full-year revenue forecast today as a result of coronavirus, predicting a three per cent hit from the pandemic.
The cigarette giant said it now expects revenue growth of between one and three per cent in 2020, compared to growth in the low end of a previous prediction of three to five per cent.
BAT blamed Covid-19 for cutting its forecast, pointing to a “very challenging and volatile trading environment”.
It had a particular impact on BAT’s emerging markets, particularly Bangladesh, Vietnam and Malaysia.
“In addition, closures and other lockdown measures in certain countries, in particular South Africa, Mexico and Argentina, have persisted longer than anticipated,” BAT said. “In South Africa there are still no signs of the Covid-19 related tobacco sales ban being lifted.”
In contrast, sales in the US have proved resilient to the coronavirus lockdown, though vaping sales remain “below historical levels” after a slowdown in the second half of 2019.
However, the knock to emerging markets has compounded BAT’s loss of sales at travel hubs, which remain closed for the duration of the pandemic.
Coronavirus has also forced BAT to scale back or postpone some new product launches, affecting growth in its new categories business.
But BAT said its new products business is “performing well”, growing share of market in all categories.