British American Tobacco has today reported a £15.7bn loss for its financial year ended 31 December after it recorded a £27.3bn on the value of its US business.
The company took a big bet on the American market in 2017 when it acquired the 57.8 per cent of Reynolds American it did not already own for a total of $49bn.
Last December, the firm said it was forced to reassess the 30-year value of its US cigarette brands after it was hit by ‘macro-economic headwinds’ in the US, sending shares down seven per cent.
It had guided around a £25bn writedown but, on Thursday, it said the value had increased to £27.3bn following the impact of “FX-related issues” and remaining time in December that had not been accounted for.
In a full-year update to markets, the firm said it has hit profitability in its ‘new categories’ division, driven by vaping products Vuse and Vue, two years ahead of schedule.
BAT’s new categories unit rose 21 per cent to contribute £398m to total profits in 2023.
The US has been a problematic region for BAT amid a rise in illicit Chinese disposable vapes there, that have been stealing market share.
BAT is aiming to generate half of its revenue from non-combustibles by 2035. It said it expects low-single-figure organic revenue growth in 2024.