British American Tobacco misses profit estimate
Cigarette volume for BAT in first-half of year
British American Tobacco Plc (BAT), Europe's largest cigarette maker, reported first-half profit growth that missed analysts' estimates, as tax increases in Turkey and Australia weighed on sales volume.
Richard Burrows, the former chairman of Bank of Ireland (BoI), was appointed chairman of the group last year.
Net income rose to £1.53bn(€1.83bn), 76.5 pence a share, from £1.45bn (€1.74bn), or 72.8 pence, a year earlier, London-based BAT said yesterday.
Turkey increased taxes on cigarettes by 29pc at the end of 2009 as part of a package of measures to reduce the government budget deficit. Australia raised its tax by 25pc on April 30 under a new programme to discourage smoking that will also include an eventual ban on cigarette brand names.
First-half cigarette volume fell 3pc, excluding the effects of takeovers or disposals, on lower shipments to Romania, Turkey, Japan and Pakistan, BAT said. That was an improvement on the first quarter's 4pc decline.
The economic slowdown has led smokers to buy fewer premium cigarettes, the company said in April.
Total volume was in line with last year at 348 billion, boosted by the takeover of Indonesian clove-cigarette maker PT Bentoel Internasional Investama.
BAT, which owns the Dunhill, Lucky Strike, Pall Mall and Kent brands, has made more than $5bn(€3.84bn) in acquisitions during the seven-year term of Chief Executive Officer Paul Adams, who retires in February.
"These results show that British American Tobacco's business is in very good shape, with continued pricing momentum, increasing market share in key markets and improving organic volume trends," Mr Burrows said.
"While the comparisons with 2009 will become tougher, shareholders should see another year of good growth in both earnings and dividends.
BAT said it plans to raise the first-half dividend by 19pc to 33.2 pence a share.