Japan Tobacco raises annual cigarette sales forecast again

JAPAN TOBACCO

31/10/2024 07:58

LONDON, Oct 31 (Reuters) - Japan Tobacco  2914.T  on
Thursday raised the full-year revenue forecast for its tobacco
business for the second consecutive quarter, citing higher
prices and better than expected third-quarter volumes.
    The maker of Benson & Hedges and Winston cigarettes said it
now expects core revenue at the tobacco business to rise 9% in
constant currency terms over the full year, versus the 5.1%
previously expected.
    
    WHY IT MATTERS
    While Japan Tobacco is looking to ramp up revenue growth
from smoking alternatives, such as its heated tobacco device
Ploom, its third quarter results show how cigarette sales
continue to drive hefty profits for their makers despite heavy
pressures on tobacco businesses. 
    Those pressures include ever-stricter regulation and falling
sales in some markets amid growing awareness of health risks,
which the sector has so far successfully offset by raising
prices for those who continue to smoke. 
    
    BY THE NUMBERS 
    * Tobacco unit's core revenue and adjusted operating profit
up 8.1% and 3.7% respectively in constant currency.
    * Unit's total volume up 2.4%, with a 2.1% increase in
tobacco volumes and an 18.1% increase in volumes for smoking
alternatives. 
    * Full year adjusted operating profit forecast also raised
to 9% growth at constant currency, versus the 5.4% forecast
previously. 

 (Reporting by Emma Rumney
Editing by Mark Potter)
 ((Emma.Rumney@thomsonreuters.com; +447391409253;))