Japan Tobacco raises cigarette unit's FY forecast as sales rise

JAPAN TOBACCO

02/08/2024 07:38

LONDON, Aug 2 (Reuters) - Japan Tobacco  2914.T  on
Friday reported a 7.1% rise in first-half core revenue at is
tobacco unit thanks to higher prices and market share gains,
prompting the cigarette maker to raise its full-year guidance. 
    The maker of Benson & Hedges and Winston cigarettes said it
now expects revenue at the unit to rise 5.1% in constant
currency terms over the full year, with adjusted operating
profit also up 5.4%. 
    
    WHY IT MATTERS 
    Japan Tobacco's performance shows that cigarette makers can
still make big profits by hiking prices and growing sales around
the world, even as ever-stricter regulation and growing
awareness of health risks drive falling smoking rates in some
markets. 
    These trends, however, have prompted the company and its
peers to develop alternative products, such as vapes, to protect
revenue as their traditional businesses come under pressure. 
    
    BY THE NUMBERS 
    * Japan Tobacco's cigarette division saw core revenue rise
7.1% at constant currency terms in the six months to end-June
    * Adjusted operating profit rose 5.3%
    * Total volumes rose 2%, with a 1.7% rise in tobacco sales
and a 25.5% rise in sales of smoking alternatives 
    * Volume growth was driven by market share gains by key
brands such as Camel and higher uptake of heated tobacco device
Ploom in Japan
    

 (Reporting by Emma Rumney; editing by Jason Neely)
 ((Emma.Rumney@thomsonreuters.com; +447391409253;))