KUALA LUMPUR (Oct 30): British American Tobacco (M) Bhd’s (KL:BAT) net profit for the third quarter tumbled to an all-time low as new regulations ate into cigarette sales.

There could be further pressure ahead with the recently announced increase in excise duty, though the full impact on the industry is yet to be determined, the company said in a statement on Thursday following the release of its financial results.

“We remain focused on strengthening our fundamentals, optimising our portfolio and executing with discipline to ensure long-term sustainability,” said BAT managing director Nedal Salem.

Net profit for the three months ended Sept 30, 2025 (3QFY2025) fell nearly 90% to RM7.02 million, its lowest on record, according to an exchange filing on Thursday. Revenue, meanwhile, halved to RM300.8 million.

A third interim dividend of five sen per share was declared and payable on Dec 5, sharply lower from the 22 sen announced a year ago.

The new pictorial health warnings requirement and retail display ban required substantial preparation and investment to ensure full compliance, BAT noted. Sales volume of its combustible products, which was already on a downtrend, fell nearly 50%.

For its first nine months, net profit fell 39.4% to RM81.24 million. Revenue dropped 25% to RM1.25 billion when compared to the same period last year.

The government raised the excise duty of cigarettes by two sen per stick, effective November, during Budget 2026 announcement.

BAT said it hopes the tax increase will not further exacerbate illicit tobacco trade, with the black market accounting for more than half of the tobacco market at the end of September. The company also expects the government to continue taking measures to combat illegal cigarettes.

“The group reiterates the importance of ongoing consultation with industry players to ensure these measures are practical, effective and achieve the intended objectives," BAT added.

Shares of BAT ended 11 sen or 1.99% higher at RM5.64 on Thursday, valuing the company at RM1.61 billion ahead of the results announcement.