JT's Domestic And International Volumes Fall

Source from:  Tobacco Reporter 10/30/2009

Japan Tobacco Inc's domestic cigarette sales volume during the six months to the end of September, at 78.6 billion, was down by 5.2 per cent on that of the six months to the end of September 2008, the company reported today. Some of this decline was attributed to the market distortions caused by the introduction last year of the age-verification system for cigarette vending machines, a factor that JT believes will diminish during the rest of the financial year. JT's market share, at 65.0 per cent, was said to be virtually unchanged during the six months period. Net sales including tax for the domestic tobacco business fell by 5.2 per cent to ￥1,575.7 billion, while net sales excluding tax fell by 5.2 per cent to ￥318.8 billion. Operating profit increased by 5.0 per cent to ￥110.8 billion. At the same time, JT reported that cigarette volume for its international business during the six months to the end of June, at 216.1 billion, was down by 0.9 per cent, though sales of its Global Flagship Brands, at 121.3 billion, were up by 1.8 per cent. Growth in the UK, France, Italy and Turkey was offset by declines in the Philippines, Iran, Ukraine, Romania and Kazakhstan. In Russia, where sales of Winston were said to have slowed marginally while LD performed strongly, the company increased its share from 35.2 per cent to 36.3 per cent. "Overall, the company's share of market in most of its key markets increased," JT said. Net sales including tax for the international division during the six months to the end of June, at ￥1,245.7 billion, were down by 20.4 per cent and net sales excluding tax were down by 18.6 per cent to ￥435 billion, though, at constant rates of exchange, net sales excluding tax increased by 9.1 per cent. Operating income was down 40.2 per cent to ￥59.8 billion. "Our six-month results demonstrate that our fundamental performance remains solid in today's challenging operating environment," said Hiroshi Kimura, president and CEO of JT. "Looking ahead, our annual EBITDA for the international tobacco business is projected to grow 13.0 per cent at constant rates of exchange, due to favorable pricing and continued share of market growth. "Sound performance of our domestic tobacco brands continues, as we aim for the third consecutive year of share of market growth." Enditem