Friday April 27, 10:49 AM
Japan Tobacco lights up record profits
TOKYO (AFP) - Japan Tobacco Inc. on Friday reported record profits for the fiscal year to March as rising sales overseas compensated for fewer Japanese smokers lighting up.
Net profits rose by 4.6 percent to an all-time high of 210.7 billion yen (1.77 billion dollars) in the fiscal year to March on revenue of 4.77 trillion yen, up 2.8 percent, the company said in a statement.
Operating profit jumped by 8.2 percent to 331.9 billion yen, also a record.
Japan Tobacco Inc, which recently bought British rival Gallaher Group (LSE: GLH.L - news) for 2.25 trillion yen, said that overseas sales remained the main driver of profit growth, with revenue outside Japan up 13.4 percent.
The group saw strong sales of Camel in Italy and France, Winston in Russia, Spain, Iran, Turkey, and Ukraine, and Mild Seven in Russia.
It said cost cuts also helped to make up for a 7.7 percent slump in its cigarette sales in Japan due to a price hike in response to higher excise taxes, helping the group to eke out a 0.3 percent rise in domestic revenue.
JT chief executive Hiroshi Kimura said the company would look to maximise synergies from the mega-merger with Gallaher "to achieve sustainable growth as a leading company in the global tobacco industry."
"In the domestic tobacco business, JT aims to secure its market share centering on the leading 'Mild Seven' brand by enhancing its brand equity," Kimura added.
But the company forecast an 11.7 percent fall in net profits in the current fiscal year to 186 billion yen and a 6.0 percent drop in operating profit to 312 billion yen. Revenue is expected to rise 2.5 percent to 4.890 trillion.
However, it said the outlook did not include the contribution from Gallaher, which it finished buying earlier this month in a deal that reinforces its position as the world's third largest cigarette manufacturer.
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