Japan Tobacco Inc's domestic sales volume during the six months to the end of September, at 50.9 billion, was down by 41.2 per cent on that of the same period of 2010.
The huge drop reflects the massive disruption caused to the company's manufacturing and distribution operations following the earthquake and tsunami of March 11. It was only in July that JT was able to start shipping all of its 73 products, and only in August that it was able to completely remove purchase order ceilings.
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But the downturn was caused in part by the market turmoil created by a largely-tax-fueled cigarette price hike of October 1 last year that was of such magnitude that it was preceded by consumer stockpiling and followed by a sharp drop in sales.
JT's market share, which stood at 20.7 per cent in April, was up to 57.8 per cent in September. Its share for the financial year ended March 31, 2011, was 64.1 per cent.
In announcing its results today, the company said that it had recently made, or was in the process of making, a number of new-product launches, including Seven Stars Cutting Menthol in August, Pianissimo ViV Menthol in November, and Zerostyle Bitter Leaf ‒ a smokeless product ‒ in December.
But it had to make a separate announcement today that it was implementing a partial product recall in respect of a newly designed Cabin Ultra Mild Box.
JT's adjusted net sales for its domestic tobacco business during April-September, at ¥279.5 billion, were down by 20.5 per cent on those of the same period of 2010.
Operating income was down by 9.4 per cent to ¥115.7 billion and EBITDA was down by 9.7 per cent to ¥135.6 billion.
"Our business is demonstrating solid performance," said Hiroshi Kimura, JT's president and CEO. "Our cigarette volume and market share in Japan have been recovering steadily from the effects of the earthquake.
"We have again delivered robust growth in both top line and EBITDA in the international tobacco business, revising upward our full year forecast excluding currency impact, driven by stronger momentum.
"We are making our utmost efforts to achieve the consolidated EBITDA growth objective over our medium term management plan period through March 2012, overcoming the impact of last year's unprecedented excise increase and this year's earthquake in Japan."
Overall, JT's adjusted net sales during the six months to the end of September, at ¥940.3 billion, were down by 8.7 per cent on those of the six months to the end of September 2010, while EBITDA fell by 3.6 per cent to ¥296.1 billion.
Operating income fell by 3.8 per cent to ¥193.0 billion, while net income was up by 17.9 per cent to ¥95.8 billion.
Japan Tobacco International's shipment volume during the six months to the end of June, at 204.9 billion, was up by 0.1 per cent on that of the six months to the end of June 2010, reflecting growth in the Middle East, Romania, Russia and Italy, offset by declines in Ukraine, Spain and Belarus.
The shipment volume of the company's global focus brands (GFB) increased by 3.2 per cent to 122.0 billion due to strong performances in Russia, Turkey, Italy, Poland and the Middle East.
JTI's core net sales were down by 1.9 per cent at ¥440.5 billion, EBITDA was increased by 2.9 per cent to ¥160.8 billion, and operating income was up by 6.5 per cent to ¥95.4 billion.
Meanwhile, JTI reported separately its July-September and January-September results.
Shipment volume during January-September, at 319.6 billion, was virtually unchanged from that of January-September 2010, but GFB shipment, at 192.7 billion, was up by 4.1 per cent.
Core net sales were up by 12.8 per cent to $8,466 million, while core net sales per thousand cigarettes were up by 12.7 per cent to $26.7. Enditem
