Japan Tobacco Sees Record Sales Despite Recession

Source from:  AFP 02/11/2009

TOKYO (AFP) - Japan Tobacco Inc. on Monday revised down its net profit forecast for the current year due to restructuring costs but said it was confident of record sales as smokers continue to light up during the recession. The company set its new forecast at 138 billion yen (1.5 billion dollars) for the year ending March 31, down from the 160 billion yen projected earlier. It said the figure reflected extra costs incurred to "strengthen its business structure." The downward revision was also due to growing taxes being paid by its affiliates, the company said. Japan Tobacco also downgraded its sales forecast for the financial year to 6.83 trillion yen from its earlier estimate of 6.87 trillion yen, but said it would still mark a record for the company. "Even in the midst of the recession and the foreign exchange fluctuations, our international tobacco business continues to be a growth engine," Japan Tobacco chief executive Hiroshi Kimura said. Japan Tobacco in 2007 bought British rival Gallaher for 19 billion dollars, the biggest ever overseas acquisition by a Japanese company. The company said that its sales of Winston cigarettes jumped nearly 18 percent in the nine months ending in September, thanks to growth in Russia, Ukraine, Turkey and other markets. Malaysia, South Korea and Taiwan meanwhile helped lift sales of Mild Seven cigarettes by 12.4 percent. For the nine months to December, net profit plunged 40.3 percent to 131.4 billion yen, with operating profit down 10.1 percent at 329.7 billion yen. The company said net profit declined on foreign exchange losses and extraordinary expenses including restructuring. Operating income fell due to goodwill amortisation, it said. However, its sales rose 13.6 percent to 5.35 trillion yen "due mainly to the strong performance of the international tobacco business as well as the consolidation of Gallaher," the company said. Enditem