BAT's Profit up on Lower Volumes

Source from:  tr.itsmyiq.com Jul 26, 2007 07/27/2007

British American Tobacco today reported group volume sales from subsidiaries at 330 billion for the six months to the end of June, two per cent down on those of the six months to June 2006. The drop in volumes was said to have been caused mainly by the high level of trade buying in some markets at the end of 2006, supply chain disruptions in the Middle East and the loss of StiX in Germany. These factors were countered in part by sales of the company's four global drive brands, whose volumes were increased by six per cent – growth that was said to have led to share improvements in many markets. "As a result of global drive brand growth and improved pricing, British American Tobacco has had a strong six months, despite the substantial impact of foreign exchange," said chairman, Jan du Plessis. "However, there have recently been significant excise increases in a number of key markets, while the level of our investment in expanding distribution and rolling out our global drive brands is set to rise over the next few months. We therefore expect our growth in profit from operations at comparable rates of exchange to slow in the second half of the year." BAT's reported group revenue declined by two per cent to £4,725 million but, at comparable rates of exchange, would have increased by four per cent as a result of more favorable pricing and better product mix. 'The reported profit from operations was 13 per cent higher at £1,492 million, or 10 per cent higher if exceptional items are excluded,' according to a note on BAT's website. 'However, profit from operations, excluding exceptional items, would have been 18 per cent higher at comparable rates of exchange, with all regions except for America-Pacific contributing to this strong result… 'Adjusted diluted earnings per share rose by nine per cent, principally benefiting from the increase in profit from operations. Basic earnings per share were higher at 52.94p (2006 48.38p). 'The board has declared an interim dividend of 18.6p, an 18 per cent increase on last year, to be paid on 12 September 2007. ' Enditem