By Timothy S. Donahue

Top Takeaways:

• Profit Decline: Third-quarter net profit fell 67% to RM2.3 million.
• Nine-Month Loss: BAT Malaysia reported a RM22.2 million loss as revenue declined 18.5%.
• Recovery Signs: Lower restructuring expenses helped the company return to quarterly profitability.

British American Tobacco Malaysia is making money again, but not nearly as much as it did a year ago.

The company reported a 67% decline in third-quarter net profit to RM2.3 million (US$567,000), down from RM7 million (US$1.72 million) a year earlier, as illicit cigarette sales and a shrinking legal tobacco market continued to weigh on its business.

Revenue for the quarter ended September 30 reached RM302 million (US$74.4 million), while operating expenses declined 40% from the previous quarter to RM46.4 million (US$11.4 million) as costs related to its Route-to-Market (RTM) transformation program eased.

For the first nine months of 2026, BAT Malaysia recorded a net loss of RM22.2 million (US$5.47 million), compared with a profit of RM81 million (US$19.95 million) in the same period last year.

Nine-month revenue declined by approximately 18.5% to RM977.6 million (US$240.8 million), compared with RM1.2 billion (US$295.6 million) a year earlier. Despite weaker year-over-year results, the company reported sequential improvements as one-time restructuring expenses declined.

BAT Malaysia returned to profitability in the second and third quarters, reducing its cumulative net loss from RM24.5 million (US$6.04 million) at the end of June to RM22.2 million at the end of September.

The results highlight the challenges facing Malaysia’s legal tobacco industry, as illicit cigarette sales continue to pressure legitimate manufacturers and erode legal market volumes.

BAT Malaysia’s RTM transformation program has also affected its financial performance, although declining implementation costs helped improve profitability in the latest quarter.

The company’s board declared a third interim dividend of 2 sen per ordinary share, totaling RM5.7 million (US$1.40 million), payable on December 28, 2026.

While BAT Malaysia has returned to quarterly profitability, its nine-month results underscore the ongoing pressure on the legal cigarette business and the need to contain operating costs as the company works to restore earnings.