Thursday May 3, 07:04 PM
BAT strikes higher profit in first quarter
 |
LONDON (AFP) - British American Tobacco (LSE: BATS.L - news) posted a near 10.0-percent rise in first-quarter profit thanks to cost savings and an "excellent" performance by its operations in emerging markets, the group said on Thursday.
The data lifted the share price of BAT, the world's second-biggest cigarette maker, to a record high in London trade, dealers said.
BAT, the maker of Dunhill, Kent and Lucky Strike cigarettes, said net profit climbed to 495 million pounds (725 million euros, 986 million dollars) in the first three months of 2007 compared with the same period a year earlier.
Group revenue dropped 3.0 percent to 2.232 billion pounds, but cost savings meant BAT posted a profits rise.
"The first quarter has been somewhat flattered by excellent performances in Brazil and South Africa," BAT chairman Jan du Plessis said in comments accompanying the earnings release.
However BAT cautioned that the performance was unlikely to be repeated during subsequent quarters this year.
The global tobacco industry is undergoing a shake-up following several takeover approaches and mergers.
Britain's Imperial Tobacco (LSE: IMT.L - news) has made a 12-billion-euro bid (16.4 billion dollars) for Franco-Spanish cigarette maker Altadis (Madrid: ALT.MC - news) and is deciding whether to hike its offer.
And last month, Japan Tobacco Inc completed its 2.25-trillion-yen (19.0 billion dollars) acquisition of British rival Gallaher Group (LSE: GLH.L - news) .
But analysts at broker JP Morgan said that BAT was unlikely to participate in further European consolidation.
"We see the first-quarter results as evidence that BAT's portfolio, with its high exposure to emerging markets and improving mix, is already attractive."
Investors cheered BAT's earnings news, sending its share price to a record high of 1,620 pence.
In late Thursday trading, BAT stood 0.57-percent higher at 1,579 pence on London's FTSE 100 (news) . The capital's leading share index was showing a gain of 0.48 percent at 6,515.40 points.
Tobacco groups are meanwhile gearing up for the start of England's smoking ban on July 1. Wales and Northern Ireland saw the introduction of bans on lighting up in enclosed public spaces last month.
Smoking was banned in Scottish cafes, pubs, restaurants and work places in March last year.
|
|
|
