British American Tobacco (LON: BATS) has been fined $635.2m plus interest because of one decade of sanctions breaches. This relates to business undertaken with North Korea between 2007 and 2017.
British American Tobacco and an indirect subsidiary in Singapore entered into a deferred prosecution agreement with the US Department of Justice and a civil settlement with the Office of Foreign Assets Control. British American Tobacco is not allowed to comment on the documentation published by the authorities.
A provision of £450m ($540m) has already been made in the 2022 interims. The 2023 full year guidance is not affected by the deal.
The global tobacco market is expected to decline by 2% in 2023, but British American Tobacco expects to achieve organic constant currency growth. Earnings per share are expected to grow by a mid-single figure constant currency percentage.
This deal with the US authorities was announced just before the end of trading in London. The share price is 50p higher at 2972p. Some of that rise came at the end of the day. The settlement does not appear to have come as a nasty surprise for the market.