British American Tobacco Kenya has raised its total dividend for the year ended December 2025 by 40 percent, rewarding shareholders after posting stronger earnings supported by lower operating costs and currency stability.
According to Charles Mwaniki, Business Daily, the cigarette manufacturer declared a final dividend of Sh60 per share. Combined with an interim payout of Sh10 per share issued earlier in the year, the total distribution rises to Sh70 per share. The final payment is scheduled for June 12, 2026, for shareholders on the register as of May 8. Overall, the payout amounts to about Sh7 billion, up from Sh5 billion distributed in 2024.
Profit Rises Despite Lower Sales
BAT Kenya’s net profit climbed 17 percent to Sh5.25 billion in 2025. This growth came even as gross sales, including indirect taxes, dropped 12.5 percent to Sh35.95 billion. The company linked the sales decline to a sharp rise in illicit cigarette trade within the domestic market.
According to management, illegal products now account for roughly 45 percent of Kenya’s cigarette market, up significantly from the previous year. The expansion of the illicit segment has continued to weigh on formal manufacturers.
However, export sales helped cushion the business. Overseas markets contribute close to half of BAT Kenya’s revenue, providing stability as local volumes soften. The company also resumed selling oral nicotine pouches during the second half of the year, adding a new revenue stream.
Cost Management and Currency Gains
A major driver of improved profitability was a 15.7 percent drop in operating costs to Sh15.72 billion. Management attributed the reduction to lower sales volumes, tighter cost control measures, and productivity improvements implemented during the year.
Currency stability also played a role. The company recorded finance income of Sh0.2 billion compared to an exchange loss in the previous year, further supporting the bottom line.
Dividend Exceeds Earnings
The Sh7 billion dividend payout surpasses the Sh5.25 billion net profit for the year. This suggests that part of the distribution will come from retained earnings and anticipated future cash flows rather than strictly from current-year income.
BAT Kenya ended the year with retained earnings of Sh11.86 billion, slightly lower than the previous year. At the same time, cash and cash equivalents increased to Sh6.22 billion, strengthening liquidity.
The company remains one of the top dividend payers on the Nairobi Securities Exchange (NSE). Its total dividend of Sh70 per share translates to a yield of about 13 percent based on a share price of Sh538. In a market where dividend yields have compressed during the current bull run, such a return stands out among listed firms.
BAT Kenya’s performance reflects a mature company focused on efficiency and shareholder returns, even as it navigates regulatory pressure and competition from illicit trade.
This piece draws on an article written by Business Daily journalist Charles Mwaniki.
