BAT posts 3% fall in volume of cigarettes
By David Jones |
October 28, 2010, Thursday
|
Print Edition
Print Edition
BRITISH American Tobacco, the world's No. 2 cigarette maker, posted a bigger than expected 3 percent fall in underlying nine-month volumes and said the recession's impact on smokers showed no sign of abating.
The maker of Kent, Dunhill, Lucky Strike and Pall Mall said yesterday that although cigarette volumes dipped, revenue showed good growth helped by price rises, the weak pound and the purchase of PT Bentoel in Indonesia in June 2009, and it still saw a year of good earnings growth for 2010.
The London-based group said the volume decline was due to recent flooding in Pakistan, where an area the size of Italy remains under water, increased illicit trade in Romania, Turkey and South Africa and also tough trading in Germany.
The 3 percent dip in underlying volumes was below analyst forecasts for a fall of 2 to 2.5 percent and was similar to the 3 percent fall seen in first-half volumes.
"The challenging economic conditions, excise driven price increases and high unemployment have led to some softening of our volumes. The recession's impact on consumers is still with us and shows no signs of abating," said Chief Executive Paul Adams in a nine-month trading update.
Analysts said the 3 percent fall in third-quarter volumes was in line with the world's largest listed tobacco group Philip Morris International Inc and better than Imperial Tobacco's 4 percent. The United States group earlier this month raised prices and its earnings forecast for 2010.
BAT spokesman Michael Prideaux said the group now expects underlying volumes to be down around 3 percent for the year due largely to Pakistan after earlier expecting its volume decline in the second half would be better than a 2 percent fall.
The maker of Kent, Dunhill, Lucky Strike and Pall Mall said yesterday that although cigarette volumes dipped, revenue showed good growth helped by price rises, the weak pound and the purchase of PT Bentoel in Indonesia in June 2009, and it still saw a year of good earnings growth for 2010.
The London-based group said the volume decline was due to recent flooding in Pakistan, where an area the size of Italy remains under water, increased illicit trade in Romania, Turkey and South Africa and also tough trading in Germany.
The 3 percent dip in underlying volumes was below analyst forecasts for a fall of 2 to 2.5 percent and was similar to the 3 percent fall seen in first-half volumes.
"The challenging economic conditions, excise driven price increases and high unemployment have led to some softening of our volumes. The recession's impact on consumers is still with us and shows no signs of abating," said Chief Executive Paul Adams in a nine-month trading update.
Analysts said the 3 percent fall in third-quarter volumes was in line with the world's largest listed tobacco group Philip Morris International Inc and better than Imperial Tobacco's 4 percent. The United States group earlier this month raised prices and its earnings forecast for 2010.
BAT spokesman Michael Prideaux said the group now expects underlying volumes to be down around 3 percent for the year due largely to Pakistan after earlier expecting its volume decline in the second half would be better than a 2 percent fall.
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