Revenue up, profit down for JT

Japan Tobacco reported revenue of ¥556.4 billion ($5.4 billion) in the first quarter of 2014, compared with revenue of ¥547.9 billion in the comparable 2013 quarter. The company made an adjusted operating profit of ¥148.9 billion during the three months, compared with ¥151.4 billion a year earlier.

The revenue increase was driven by a robust price mix in the company’s international tobacco business and the depreciation of the Japanese yen against the U.S. dollar, despite the temporary slowdown in JT’s domestic business following Japan’s April consumption tax increase. The price mix of the international tobacco business was not enough to prevent the 2.8 percent decline in adjusted operating profit however.

“Our international tobacco business continued to demonstrate solid earnings growth, underpinned by enhanced brand equity and pricing opportunities,” said Mitsuomi Koizumi, president and CEO of JT. “This underlines the strength of our business fundamentals at a time when the industry is contracting.

“In Japan, after the temporary slowdown caused by the April VAT hike, Mevius is once again driving our growth in market share. Although the overall business environment remains challenging, I firmly believe we can achieve the targets set out in our business plan 2014.”