British American Tobacco (BAT) is set to release its 2023 results on Thursday. The company has provided a consensus forecast of £27.60 billion ($34.77 billion) for its revenue in 2023, slightly lower than the £27.655 billion reported in the previous year.
Adjusted Operating Profit
According to the company's consensus forecast, BAT is expected to report an adjusted operating profit of £12.595 billion for 2023. This is a slight increase from the previous year's adjusted profit from operations of £12.41 billion.
Over the past three months, BAT shares have experienced a 7.3% decline, with a year-on-year decrease of 25%.
Key Points to Watch
Impact of Writeoff
In a December update, BAT announced that it would incur a $31.5 billion charge to devalue its U.S. cigarette business. This significant writeoff is attributed to macroeconomic pressures and the company's strategic focus on noncombustible products. Investors will be closely monitoring the results for further insights into this writedown.
Smokeless Products Revenue
BAT is expected to see an increase in smokeless products revenue, with estimates at £3.46 billion compared to £2.89 billion previously. Citi analysts believe that the U.S. regulatory environment will become more favorable in the coming months, citing potential changes in marketing restrictions and stricter enforcement against illicit disposable vape sales.
Guidance for 2024
Citi analysts anticipate that BAT will reiterate its guidance for the 2024 metrics in its results. The company previously forecasted low single-digit organic revenue growth and adjusted operating profit growth for the year. As the December update was comprehensive, Citi expects few surprises.