Volume sales down at JT and JTI
Japan Tobacco Inc.’s domestic cigarette sales volume during the six months from April to September, at 53.5 billion, was down by 10.2 percent on that of April-September 2013, 59.6 billion.
In announcing this morning its consolidated results, JT said that volume sales had suffered a temporary slowdown following a tax hike in April.
Core revenue had declined by 7.0 percent (from ¥335.8 billion to ¥312.4 billion) and adjusted operating profit had declined by 7.4 percent (from ¥131.2 billion to ¥121.5 billion) due to the lower sales volume, partly offset by cost reductions.
JT said that it had taken steps to strengthen brand equity, including the launch in July of four new Seven Stars variants and, in September, of two Peace variants.
Mervius had shown steady market share growth driven by the Premium Menthol Option line and, overall, market share had recovered from 59.1 percent in April to 59.9 percent in April-September.
Meanwhile, Japan Tobacco International’s total cigarette and cigarette-equivalent shipment volume during the six months from January to June, at 190.6 billion, was down by 5.6 percent on that of January-June 2013, 202.0 billion.
Within that total, GFBs (global flagship brand) shipment volume was down by 4.0 percent to 123.0 billion.
The total and GFB volume declines were blamed on industry contraction in France, Russia and Spain, on first-quarter trade-industry adjustments in some markets, and on intense price competition in the ‘value’ segment of Turkey’s market.
The company reported that its year-on-year market share had increased in the key markets of France, Spain, Turkey and the UK, while, in Russia, GFBs’ share had continued to increase and their value share had been stable.
JTI’s core revenue and adjusted operating profit in US dollars at constant foreign exchange grew by 4.2 percent and 11.7 percent respectively, with robust price/mix compensating for the overall volume decline.
Core revenue and adjusted operating profit on a reported basis increased by 0.6 percent and 3.3 percent respectively. And as a result of the currency depreciation against the US dollar, core revenue and adjusted operating profit in Japanese Yen grew by 7.6 percent (from ¥559.7 billion to ¥602.0 billion) and 10.4 percent (from ¥199.2 billion to ¥219.9 billion) respectively.
Including the results of its other businesses, JT’s April-September revenue increased by 1.3 percent to ¥1,174.4 billion and its adjusted operating profit increased by 3.0 percent to ¥328.3 billion.
Operating profit was down by 11.6 percent to ¥307.1 billion and the profit attributable to the owners of the parent decreased by 7.5 percent to ¥219.3 billion.
JT’s president and CEO, Mitsuomi Koizumi, said that against the backdrop of significant industry contraction, JTI’s business fundamentals remained strong, driving market share gains in most key markets. “Pricing continues to be the main driver of earnings growth and the decline in total shipment volume has slowed down,” he said. “Our international business is on track for a double-digit profit increase.
“In Japan market share has steadily recovered from the tax increase impact. While the operating environment is increasingly competitive, we strive to achieve further market share gains through brand equity strengthening initiatives.”
JTI reported separately that its total cigarette shipment during January to September, at 296.6 billion, was down by 4.9 percent on that of January-September 2013, with GFB volume down by 2.2 percent to 194.3 billion.
