KUALA LUMPUR (Feb 9): British American Tobacco (M) Bhd (KL:BAT) closed its latest fiscal year with its strongest quarter in seven years on the back of the retail price hike of its cigarette brands and higher shipment volumes.

Net profit for the fourth quarter ended Dec 31, 2025 (4QFY2025) more than doubled to RM121.2 million from RM48.97 million a year earlier, according to a bourse filing on Monday. Revenue rose 45.2% to RM947.98 million from RM653.03 million.

Retail prices of BAT Malaysia's cigarette brands, which include Dunhill, Benson & Hedges, Peter Stuyvesant, KYO, Rothmans and Luckies, were hiked in November last year following the two-sen-per-stick excise duty hike announced under Budget 2026.

The group said volume surged 172% as retailers built up stock ahead of the retail price adjustment. This, combined with cost optimisation initiatives, contributed to the strong earnings, it added.

BAT Malaysia declared a fourth interim dividend of 39 sen per share, amounting to RM111.36 million, to be paid on April 10, bringing full-year payout to 63.5 sen per share.

For the full financial year, BAT Malaysia's net profit was up 10.5% to RM202.45 million from RM183.14 million in FY2024, as revenue slipped 5.2% to RM2.20 billion from RM2.32 billion.

The group's performance in the final quarter amounted to over half of full-year earnings.  

BAT Malaysia reiterated that the excise duty hike is expected to further incentivise the tobacco black market, given the widened price gap between legal and illegal tobacco products.

While the illicit market’s share of the market eased to 54.4% from 57.2% a year earlier, BAT Malaysia managing director Nedal Salem said it remains the single largest structural barrier to a sustainable legal industry and the government’s tax revenue recovery.

“The group remains supportive of the government’s efforts to combat the tobacco black market and will continue working in close partnership with enforcement agencies to strengthen market integrity. The record enforcement achievements in 2025 underscore the impact of coordinated action,” he said.

Shares in BAT Malaysia ended five sen or 1.11% higher at RM4.57, valuing the group at RM1.3 billion.