26th Apr 2016 06:26
LONDON (Alliance News) - British American Tobacco PLC on Tuesday reported growth in revenue in the first quarter of 2016, but warned that adverse foreign exchange rates could hit profit in the full year.
The tobacco company said revenue in the three months ended March 31 grew by 1.7% on the same period the prior year, although this was held back by unfavourable movements in foreign exchange rates. Revenue would have grown by 7.5% at constant currencies.
Cigarette volume rose by 3.6% in the quarter, which BAT said was uplifted by recent acquisitions while benefiting from inventory movements in the comparator period.
BAT noted that the trading environment remains challenging due to continued currency volatility, which is estimated to lead to a profit headwind of 7% and consequent impact on operating margin in the full year. It did note, however, that if sterling stays at the current rate for the rest of the year, it should lead to a 3% benefit to earnings.
"While profit growth will be weighted to the second half of the year, partly due to the impact of foreign exchange on our cost base, I remain confident that we will deliver another year of good earnings growth at constant rates of exchange," Chief Executive Nicandro Durante said in a statement.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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