British American Tobacco Zimbabwe (Holdings) Limited has issued a profit warning indicating that its financial results for the year ended 31 December 2025 will reflect a significant improvement in profitability, largely due to the absence of the severe foreign exchange losses that weighed heavily on prior performance.
In a notice to shareholders, the company said its upcoming results, expected on or before 31 March 2026, will differ materially from those reported for the 2024 financial year.
At the centre of BAT Zimbabwe’s disclosure is the destabilising impact of currency volatility and inflation, which the company identified as the primary drivers of depressed earnings in 2024.
The group said its prior-year performance was significantly undermined by exchange losses and inflationary pressures linked to compliance with international accounting standards, particularly IAS 21 and IAS 29. These standards required the revaluation of foreign currency balances and adjustments for hyperinflation, amplifying reported losses.
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The situation was further compounded by Zimbabwe’s monetary policy shift in April 2024, when authorities transitioned from the Zimbabwe dollar to the Zimbabwe Gold. BAT noted that the changeover, combined with elevated inflation levels prior to August 2024, triggered substantial monetary losses.
The tobacco group attributed its expected rebound in 2025 profitability to improved macroeconomic conditions and internal strategic adjustments.
Key among these was the company’s migration to a multicurrency billing model in August 2024, which it said enhanced revenue realisation and reduced exposure to local currency volatility. Increased currency stability during the reporting period also contributed to the anticipated recovery.
Additionally, the company highlighted that the absence of the large exchange losses recorded in 2024 will significantly improve year-on-year comparability.
BAT Zimbabwe emphasised that the expected variance in financial performance constitutes price-sensitive information, requiring disclosure under Section 32 of the Zimbabwe Stock Exchange Listings Rules.
The company has advised shareholders and the investing public to exercise caution when trading its shares until the full financial results are published.
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