23rd Oct 2013 10:30
LONDON (Alliance News) - British American Tobacco PLC, the world's second-largest private-sector tobacco company by revenue after Philip Morris International Inc., said that sales over the last three quarters were hit by adverse exchange-rate movements and lower industry volume in key markets such as Brazil, Russia and Western Europe.
The tobacco giant said that revenues for the nine months to September 30 increased by only 0.7%.
However, it said that, on a constant exchange-rate basis, revenues rose by 3.5%, driven by strong pricing.
Total tobacco volume, including cigarettes, declined 3% from last year, while cigarette volume from its subsidiaries fell by 3.2% to 501 billion. It said that total tobacco volume was lower than the year before, due to industry volume declines, excise-driven trade inventory movements in Brazil and the comparison with a leap-year in 2012.
The group said that lower volumes in Brazil, Russia, Turkey, Ukraine, Egypt and Western Europe, more than offset stronger growth in markets such as Bangladesh, Pakistan, Vietnam, the Middle East and the Philippines.
It said that its key brands - Dunhill, Lucky Strike, Pall Mall and Kent - saw cigarette volume growth of 1.9%, with strong volume growth from its Dunhill brand which increased by 9.6%, buoyed by a strong performance in Indonesia and South Korea.
Pall Mall volume was also up, by 5.2%, as growth in areas of South America offset declines elsewhere, while Kent and Lucky Strike volume both declined, down 4% and 5.3% respectively.
British American Tobacco also said that its other tobacco products performed well in the nine month period, with growth in fine cut tobacco driven by a 3.3% increase in Western Europe.
"The group continued its good performance against a backdrop of adverse exchange rate movements, lower industry volume and instability in some parts of the world. We have grown revenue and market share, our pricing momentum remains strong and our Global Drive Brands continue to perform well. We remain on track for a year of solid earnings growth," said Chief Executive Nicandro Durante in a statement.
British American Tobacco recently launched its first e-cigarette in the UK, and said that early trading signs are encouraging.
Shares in the tobacco company were down 3.00 pence Wednesday morning, trading at 3,382.00p per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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