JT International Volumes up Hugely - with a Little Help From Gallaher

Source from:  tr.itsmyiq.com May 1, 2008 05/04/2008

Japan Tobacco Inc's domestic volume sales during the year to March 31 fell by 4.1 per cent to 167.7 billion, but they were enough to push its market share up by 0.1 percentage point to 64.9 per cent. This was a small but significant increase in share and it allowed president and CEO, Hiroshi Kimura, to say, "Through an aggressive investment in our core brand focusing on Mild Seven, we successfully achieved an expansion of our domestic market share on a full-year basis for the first time since our privatization in 1985". However, due to the decline in volume sales and an increase in costs related to the purchase of raw materials and sales promotions, net sales for the domestic business fell by 1.6 per cent to ¥3,362.3 billion and operating income fell by 9.4 per cent to ¥222.3 billion. But as usual, there was good news from the international division, which reported its January-December results. JT International's volume sales for the nine months were increased by 60.6 per cent to 385.6 billion, while sales of its global flagship brands (GFBs) grew by 40.0 per cent to 203.2 billion. "I am very proud to say that our international tobacco business has continuously performed with the fastest growth in the industry thanks to consistent brand equity building," said Kimura. "By leveraging our enlarged business base and strengthened brand portfolio, driven by the integration of Gallaher, we will pursue long-term quality top-line growth in a consistent manner." The growth in sales of GFBs was driven by Winston in Russia, Ukraine, Turkey, and Spain; and Camel in Spain, France, Italy and Russia. Sales were also pushed ahead by sales of the newly acquired Gallaher GFBs: Benson & Hedges and Silk Cut in the U.K. and Ireland; and LD, Sobranie and Glamour in Russia, Ukraine and Kazakhstan. Net sales for the international business during the nine months to December were up by 164.1 per cent to ¥2,639.9 billion, while operating income was up by 153.3 per cent to ¥205.3 billion. Overall, JT's net sales for the year to the end of March increased by 34.4 per cent to ¥6,409.7 billion, operating income increased by 29.7 per cent to ¥430.5 billion, and net income was up by 13.3 per cent to ¥238.7 billion. Meanwhile, JT also announced today JT International's results for the first quarter to March 31. Volume sales for the first quarter, at 103.9 billion, were 79.9 per cent higher than those of the first quarter of 2007, while sales of GFBs were up by 56.6 per cent to 55.6 billion. At the same time, net sales increased by 176.8 per cent to US$6.317 billion, net sales excluding tax were up by 94.9 per cent to US$2.452 billion, and net sales per thousand cigarettes, excluding tax, rose by 8.4 per cent to US$23.6. Enditem