British American Tobacco shares slumped on Thursday as it warned of tougher regulatory headwinds in Australia and Bangladesh after a sizeable writedown in Canada dampened its return to profit.
The maker of Lucky Strike and Dunhill cigarettes posted a net profit of 拢3.1 billion ($3.9 billion) last year, BAT said in a results statement.
That compared with a loss after tax of 拢14.4 billion in 2023 following a hit to its US business.
Bangladesh has meanwhile implemented 鈥榓 substantial increase鈥� in tobacco duties and VAT, the group noted.
鈥榃e expect significant regulatory and fiscal headwinds in Bangladesh and Australia to impact our combustibles performance,鈥� chief executive Tadeu Marroco said in the results statement.
In 2012, Australia became the first country to mandate a plain cigarette pack, a policy since copied by many countries.
It intends to further tighten its legislation starting in April, BAT highlighted.
The company said its total revenue fell five per cent last year to around 拢26 billion, with the tobacco group hit by the sale of its business in Russia and Belarus.
BAT, along with other tobacco majors, has been developing its 鈥榥ew categories鈥� 鈥� such as electronic cigarettes, heated tobacco, and oral nicotine products 鈥� to hedge against struggling cigarette sales.
Revenue for these products grew 2.5 per cent last year, and now represent 17.5 per cent of total revenue, it said.
The return to profit comes after the company was hit in 2023 by a bigger-than-expected impairment of 拢27.6 billion, mainly on its US business.
Marroco added Thursday that BAT鈥檚 US operations have since been strengthened, despite 鈥榓 challenging macro-economic backdrop and a growing presence of illicit single-use vapour product鈥�.
In Britain, the Labour government plans to prevent anyone born after January 1, 2009 from legally聽smoking聽by gradually raising the age at which tobacco can be bought.
The legislation will also introduce restrictions on vape advertising and sponsorship as well as restricting flavours, displays and the packaging of e-cigarettes to reduce their appeal to children and young people.