28th Oct 2015 07:30
LONDON (Alliance News) - British American Tobacco PLC Wednesday reported a fall in sales in the first nine months of 2015 as it was hit by movements in foreign exchange rates, which it warned may harm operating profit in the full year.
The tobacco company said revenue in the nine months ended September 30 declined 6.5%, although it would have risen 4.2% if foreign exchange rates had remained constant. Cigarette volume from subsidiaries decreased 1.8% to 487 billion in the period.
It said revenue was driven by strong pricing, but that it was hit by significant movements in many of its key trading currencies.
"The trading environment remains challenging due to the slower than expected recovery in the global economy, continued pressure on consumer disposable income worldwide and significant currency headwinds. If exchange rates stay the same for the remainder of the year the group would have adverse transactional and translational foreign exchange rate impacts to operating profit of approximately 6% and 12% respectively," BAT warned.
"Performance will moderate in the final quarter partly due to a strong comparator and the impact of the deterioration in exchange rates. There will be increased marketing investment and geographic expansion of next generation products in quarter-four, however I remain confident that we are on track to deliver another year of good earnings growth at constant rates of exchange," Chief Executive Nicandro Durante said.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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