British American Tobacco Sees Strong 1st Half Profit
July 27 2017 - 3:17AM
Dow Jones News
By Saabira Chaudhuri
LONDON--British American Tobacco PLC (BTI) Thursday reported
sharply stronger first-half operating profit and sales as the
tobacco giant was helped by currency tailwinds.
Earlier this week, BAT closed a deal to acquire the remainder of
Reynolds American Inc. it didn't already own, making it the world's
largest listed tobacco company.
The owner of Dunhill, Lucky Strike and Pall Mall brand
cigarettes said net profit during the six months ended June 30 fell
15% to 2.26 billion pounds ($2.97 billion) as the company felt the
impact of last year's sale by Reynolds of the international rights
to the Natural American Spirits brand. The U.S. company--which BAT
had owned 42% of for years before acquiring it outright--sold the
rights to Japan Tobacco Group in January 2016 for $5 billion.
BAT's adjusted operating profit--which strips out restructuring
and integration costs and the impairment of trademarks--rose
16%.
Following Britain's vote to leave the European Union and
sterling's consequent slide, BAT has benefited from a so-called
"translational" impact, in other words money earned abroad
translates into more pounds back home.
Revenue at BAT rose 16% to GBP7.72 billion, helped by sterling's
weakness, while revenue at constant currency, adjusted for excise
on goods purchased from third parties, was up 2.5%.
Group cigarette volume was 314 billion, a decline of 5.6% on the
same period last year.
Last month BAT said it expected to profit growth to be weighted
to the second half of the year because of the timing of shipments
and the way it has allocated marketing spend, investments in next
generation products. Thursday, Chairman Richard Burrows said the
company is confident of delivering another year of good earnings
growth at constant currency rates.
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com
(END) Dow Jones Newswires
July 27, 2017 03:02 ET (07:02 GMT)
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