JT''s Volume Inches Up But JTI''s Volume Drops Sharply in First Six Months

Source from:  Tobacco Reporter  10/29/2013

Japan Tobacco Inc.'s domestic cigarette sales volume during the six months from April to September, at 59.6 billion, was up by 0.1 per cent on that of April-September 2012.

In announcing this morning its consolidated results, JT said that a strong performance by Mevius had contributed to its domestic market share reaching 60.6 per cent for April-September, up from 59.5 per cent for April-September 2012.

The share increase had been led by a number of new product and sales promotion initiatives, including the introduction of value-added products into the growing menthol segment, it said.

At the same time, the company's core revenue from domestic cigarette sales grew by 0.2 per cent to ¥335.8 billion but its adjusted EBITDA fell by 0.6 per cent to ¥153.3 billion.

Meanwhile, Japan Tobacco International's total cigarette and cigarette-equivalent shipment volume during the six months from January to June, at 201.6 billion, was down by 5.1 per cent on that of January-June 2012.

Within that total, GFB (global flagship brand) shipment volume was down by 2.3 per cent to 127.9 billion.

The fall in total volume was put down to continuing industry contraction and trade inventory adjustments in the first quarter.

'Year-on-year market share continued to grow in most key markets,' JT reported. 'In Russia, we increased GFB share of market and, as a result, total share of value.'

GFB shipment volume declined as growth in the Caucasus markets, Czech Republic, Hungary, Kazakhstan, Turkey, Russia and other CIS markets could not fully offset industry contraction in other markets, particularly those of Europe.

JTI's core revenue and adjusted EBITDA in US dollars grew by 2.0 per cent and 4.9 per cent respectively as a price/mix improvement more than compensated for the volume decline and unfavorable currency movements. At constant rates of exchange, core revenue and adjusted EBITDA grew by 4.1 per cent and 7.0 per cent respectively.

Including the results of its other businesses, JT's April-September revenue increased by 9.6 per cent to ¥1,159.1 billion and its adjusted EBITDA increased by 13.0 per cent to ¥371.7.

Operating profit was up by 30.8 per cent to ¥347.4 billion and the profit attributable to the owners of the parent increased by 40.5 per cent to ¥237.1 billion.

JT's president and CEO, Mitsuomi Koizumi, who yesterday announced that JT was slashing its domestic workforce by about 18 per cent, shutting factories and cutting back on certain operations so as to protect profits, said today, in part, that the company was confident it would continue to deliver double-digit full year earnings growth on a constant currency basis. "The overall results of the first two quarters indicate that we are on track to achieve our full year targets," he said.

JTI reported separately that its total cigarette shipment during January to September, at 311.2 billion, was down by 5.1 per on that of January-September 2012, with GFB volume down by 2.1 per cent to 198.2 billion. Enditem