Volumes Down at JT And JTI

Source from:  Tobacco Reporter 07/31/2009

Japan Tobacco Inc's domestic tobacco volumes during the first quarter to the end of June, at 39.0 billion, were 7.2 per cent down on those of the same period of last year. The drop in volume was said to have been partly caused by trade inventory adjustments related to the introduction of vending machines requiring age verification cards, which occurred between March and July 2008. Excluding this effect, volume was down by 4.2 per cent, which was in line with expectations. At the same time, JT reported that it had been performing robustly in respect of its market share, which, boosted by promotions of existing and new products, stood at 65.1 per cent. Net sales including tax fell by 7.5 per cent to ¥779.7 billion, while net sales excluding tax fell by 7.2 per cent to ¥158.3 billion, and operating income fell by 2.2 per cent to ¥54.6 billion. Looking at its overall business, JT described the first quarter performance as solid. "We are off to a good start to achieving our outlook for this fiscal year," said Hiroshi Kimura, president and CEO. "Negative currency exchange and the factors specific to the markets concerned affected our first quarter performance. Nevertheless, our fundamental momentum remains solid in both the domestic and international tobacco businesses. We remain alert to currency and economic volatilities, while the effects have been within the range of our estimates." Volume sales at Japan Tobacco International (JTI) during January-March were down by 1.4 per cent to 100.9 billion year-on-year, but sales volumes of its Global Flagship Brands (GFBs) increased by 2.6 per cent to 57.1 billion. Net sales including tax, at ¥568.3 billion, were down by 23.5 per cent, while net sales excluding tax, at ¥201.3 billion, were down by 21.0 per cent, primarily due to negative currency impacts. Net sales excluding tax, calculated at constant rates of exchange, were up by 7.9 per cent. JT said given that the fundamentals in its domestic and international tobacco businesses remained solid, and given that its pharmaceutical and food businesses had been performing in line with predictions, the company maintained its outlook for the fiscal year ending March 31, 2010. The pharmaceutical business lost ¥3.2 billion on sales down 31.0 per cent to ¥11.1 billion, while the food business lost ¥3.6 billion on sales down 12.2 per cent to ¥98.8 billion. Overall, net sales including tax, at ¥1,463.1 billion, were down by 14.9 per cent and net sales excluding tax, at ¥474.8 billion, were down by 15.1 per cent. Operating income, at ¥84.2 billion, was down by 23.7 per cent, while net income, at ¥42.8 billion, was increased by 153.5 per cent. Meanwhile, JTI's volume sales for the six months to the end of June, at 216.1 billion, were down by 0.9 per cent, while sales of its GFBs at 121.3 billion, were up by 1.8 per cent. Net sales excluding tax, at US$4.552 billion, were down by 10.7 per cent, while net sales per thousand cigarettes, excluding tax, at US$21.3, were down by 11.5 per cent. Net sales excluding tax and net sales per thousand cigarettes would have increased by 9.1 per cent and 8.1 per cent respectively at constant rates of exchange, mainly driven by pricing. Enditem