British American Tobacco (BAT) Kenya has reported strong financial results for the year ended December 31, 2025, despite illegal cigarettes continuing to hurt its domestic sales.
The company’s board has proposed a total dividend payout of Ksh 70 per share, including a Ksh 60 final dividend to be approved at the Annual General Meeting on June 12, 2026, and an interim dividend of KSh 10 per share that was already paid. If approved, this would be one of the highest dividend payouts in recent years.
BAT Kenya’s profit before tax rose 18 per cent to Ksh 7.7 billion, up from Ksh 6.5 billion in 2024. The increase was driven by strict cost controls and lower finance costs, which offset weaker sales.
Despite the profit growth, net revenue fell about 10 per cent, dropping to Ksh 23.2 billion from KSh 25.7 billion the previous year.
The decline was largely due to the expansion of the illicit cigarette market, which now accounts for around 45 per cent of the domestic market, up from 37 per cent in 2024. This surge is estimated to have cost the government KSh 12 billion annually in lost tax revenue.
Total operating costs dropped 15 per cent to Ksh 15.7 billion, reflecting lower sales volumes and efficiency gains from productivity and cost-saving initiatives. Finance income also improved, with the company recording Ksh 200 million, compared with an exchange loss of Ksh 800 million in 2024, thanks to the stability of the Kenyan shilling and prudent cash management.
Managing Director Crispin Achola said the results show BAT Kenya’s resilience despite the challenging market.
“I am happy to report that despite a challenging environment driven by the growth of illicit cigarettes that now dominate the market locally and regionally, the company was able to post positive results,” he said.
Achola added that roughly half of the company’s revenue came from exports, and the resumption of oral nicotine pouch sales in the second half of the year also supported revenue. “Profitability was positively impacted by currency stability and proactive cost management initiatives that more than offset inflationary pressures,” he said.
He warned that addressing the illicit cigarette trade requires stronger enforcement, including tighter border controls, better market surveillance, stricter penalties, and improved inter-agency collaboration.
“This will dismantle illicit supply networks, restore market integrity, protect compliant businesses and safeguard critical fiscal revenues that support national development priorities,” Achola said.
BAT Kenya reaffirmed its commitment to working with government authorities to combat illegal trade while advancing its strategy of offering reduced-risk alternatives, including the relaunched oral nicotine pouch products.
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