BAT faces challenges in the U.S. market but maintains growth forecasts

  • British American Tobacco swings to pretax loss due to write-down of U.S. cigarette brands
  • Pretax loss for 2023 was £17.06 billion compared to a profit of £9.32 billion in the previous year
  • Impairment of £27.6 billion driven by pressure on traditional cigarette brands in the U.S.
  • Adjusted profit from operations slightly increased to £12.465 billion
  • New categories revenue rose to £3.35 billion
  • Global tobacco industry volume expected to decline around 3% in 2024
  • BAT backs prior guidance for low single-digit organic revenue and adjusted operating profit growth for the year

British American Tobacco has announced a swing to a pretax loss for 2023, primarily due to a write-down of its U.S. cigarette brands. The company reported a loss of £17.06 billion, compared to a profit of £9.32 billion in the previous year. This swing was largely driven by an impairment of £27.6 billion, with £27.3 billion related to pressure on traditional cigarette brands in the U.S. as the company shifts focus to smokeless products. Despite the challenges, adjusted profit from operations slightly increased to £12.465 billion. New categories revenue also saw growth, rising to £3.35 billion. Looking ahead, BAT expects the global tobacco industry volume to decline around 3% in 2024 but maintains its guidance for low single-digit organic revenue and adjusted operating profit growth for the year.

Public Companies: British American Tobacco (BAT)
Private Companies:
Key People: Joe Hoppe (Author), Tadeu Marroco (Chief Executive)

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Factuality Level: 7
Justification: The article provides financial information about British American Tobacco’s pretax loss, write-down of cigarette brands, and forecasts for growth in 2024. The information seems to be based on the company’s official statements and financial data. However, the article lacks in-depth analysis and context, and it does not provide any opposing viewpoints or independent verification of the information presented. Therefore, while the article appears to be factually accurate, it may be lacking in comprehensive reporting.

Noise Level: 3
Justification: The article provides a straightforward report on British American Tobacco’s financial performance, including a pretax loss driven by a write-down of its U.S. cigarette brands. It also mentions the reasons behind the loss, such as smokers switching to cheaper brands and a rise in illegal disposable vapes. The article includes some financial figures and forecasts, but lacks in-depth analysis or exploration of the consequences of the company’s decisions. Overall, it stays on topic and provides relevant information, but lacks scientific rigor, intellectual honesty, and actionable insights.

Financial Relevance: Yes
Financial Markets Impacted: The financial markets impacted by this news article are the tobacco industry and potentially the stock market, as British American Tobacco (BAT) is a FTSE 100 company.

Presence of Extreme Event: No
Nature of Extreme Event: No
Impact Rating of the Extreme Event: No
Justification: The news article does not describe any extreme events. It primarily focuses on BAT’s financial performance, including a pretax loss driven by a write-down of its U.S. cigarette brands and its forecasts for growth in 2024.

Reported publicly: www.marketwatch.com