BAT’s R8.1bn Canada payment will dent 2019 profits
The Canadian units of British American Tobacco, Philip Morris International and Japan Tobacco, have lost an appeal seeking damages
British American Tobacco (BAT) has said a C$758m (R8.1bn) sum it previously set aside to cover a possible legal defeat in Canada will weigh on profit this year, after a Quebec court ruled against it in class-action lawsuits.
The Lucky Strike maker made the payment after a 2015 court decision, and the deposit has been held as an asset on its balance sheet up to and throughout 2018.
The Canadian units of BAT, Philip Morris International and Japan Tobacco, lost an appeal on Friday in lawsuits seeking C$17bn (R181bn) in total damages.
The London-based company said on Tuesday that it will take a charge against 2019 profit in the amount of the escrow deposit. BAT’s Canadian unit plans to appeal the ruling.
The Quebec court of appeal upheld a lower-court decision with minor changes, according to the ruling released on Friday.
The lawsuits were in favour of smokers seeking damages for addiction and smoking-related diseases, who argued they were never warned of the risks.