BAT Kenya is eyeing at least Sh263 million from the sale of five pieces of land, joining the list of companies that have been disposing of idle properties.
The cigarette maker says in its latest annual report that the board has approved the sale of the properties since they have not been in use.
The planned sale has seen the firm classify the land as current assets held for sale as opposed to holding them in the books of account as fixed assets under land and buildings.
“The properties comprise land and buildings in the leaf-growing areas. Given that the properties met the criteria for classification as held for sale under IFRS (International Financial Reporting Standards) 5— they were recorded at the lower of their net book value and fair value less costs to sell,” said BAT.
The Nairobi Securities Exchange-listed firm did not give details about the size of the lands or any plans for the proceeds.
BAT board initially targeted to sell six pieces of land and get at least Sh301.67 million but has decided to retain one. The piece that has been reclassified to fixed assets has a fair value of Sh38.4 million.
The figures are based on Knight Frank Valuers Limited estimates, which last valued the firm’s land and buildings in 2022. The valuation was on an open market value basis. Others that have sold or announced plans to sell land include CIC Insurance, Uchumi Supermarkets and Eveready.
BAT Kenya reported a 19.2 percent drop in net profit to Sh5.57 billion in the year ended December 2023 blamed on reduced sales as increased taxes pushed consumers to illicit cigarettes.
The drop in profit was the first since 2019 when earnings dipped by 4.9 percent to Sh3.89 billion and came on the back of a fall in revenues and increased excise duty and value-added tax.
BAT estimates, based on third party research, put illicit trade in tax-evaded cigarettes at 27 percent of all cigarettes sold in the market. It says the illicit trade hurts the industry and denies the government about Sh7 billion per year in taxes.
