Japan Tobacco Faces Declines in the First Half of 2013

Published on March 3rd, 2014 00:00

Japan Tobacco's local cigarette sales volume in the course of the six months starting April to September, increased by about 0.1 % in comparison to that of April-September 2012. In declaring today its combined final results, JT reported that a solid overall performance by its popular Camel cigarette brand had led to its local market share achieving 60.6 % for April-September, higher from 59.5 % in the period April-September 2012.

The share boost had been guided by a range of new smoking product and sales marketing projects, which include the launch of value-added products into the increasing menthol area, it added. Simultaneously, the company’s main profit from local cigarette sales increased by 0.2 % to ¥335.8 billion; however its adjusted earnings before interest, tax, depreciation, and amortization dropped by around 0.6 % to ¥153.3 billion.

At the same time, Japan Tobacco International’s entire cigarette shipment volume within the first half of the year, declined by 5.1 % in comparison to the results faced for the same period in 2012.  Within that overall, global flagship brand (GFB) shipment volume dropped by 2.3 % to 127.9 billion.“Year-on-year market share persisted to increase in the majority of crucial markets,” JT claimed. “In Russia, we amplified global flagship brand share of market and, therefore, entire share of value.” GFB shipment volume decreased as positive results in the Czech Republic, Hungary, Kazakhstan, Turkey, Russia and some other markets could not completely compensate industry shrinkage in some other markets, especially those of Europe.

JTI’s key profit in U.S. dollars boosted by 2.0 % and 4.9 % correspondingly as a price/mix enhancement more than offset for the volume drop and negative currency actions. At persistent rates of exchange, core profits increased by 4.1 % and 7.0 %, respectively. Together with the results of its other companies, JT’s April-September profits have boosted by 9.6 %. Operating revenue raised by about 30.8 % and the income owing to the proprietors of the parent company have boosted by 40.5 %.

JT’s president and CEO, Mitsuomi Koizumi, who recently declared that JT was reducing its local employees by around 18 %, closing factories and reducing particular operations in order to guard earnings, mentioned these days, to some extent, that the company was assured it would carry on to provide double-digit full-year revenue development on a regular currency basis. “The entire outcomes of the first two quarters point out that we are on the course to accomplish our full-year objectives,” he explained. JTI also stated that its complete cigarette shipment within the second half of the year, dropped by 5.1 %.