JT Net Profit Rises 40% on Domestic Tobacco Sales

Source from:  Asian Review 05/04/2016

Japan Tobacco's net profit increased 40% on the year for the January-March quarter, lifted by demand at home ahead of price hikes and gains from real estate sales.

The company, also known as JT, announced 145.4 billion yen ($1.36 billion) in profit for the quarter Monday. Sales grew 3% to 534 billion yen, while sales volume rose 7%.

JT's share of the Japanese tobacco market grew 2.6 percentage points to 62.4%. Rush buying ahead of price hikes on the mainstay Mevius line of products in April gave business a boost. Brisk sales by the Natural American Spirit brand, which JT acquired in 2015, helped bolster share as well.

Operating profit surged 41% to 203.6 billion yen, helped by 56 billion yen in profit on property sales. But growth totaled 3% when such one-time gains and losses were excluded. Expanding business at home led the rise. Pharmaceutical operations moved into the black.

Overseas operating profit dropped 5%, excluding one-time charges. Weakness in the ruble and British pound shaved earnings by 27.6 billion yen in conversion. An increase in market share centered on Europe failed to compensate for exchange losses.

JT retained guidance of an 18% drop in net profit to 399 billion yen for the year ending in December. Enditem