Japan Tobacco’s (JT) adjusted operating profit at constant exchange rates was up 7.2 percent in the first quarter of 2019, driven by robust pricing in both the international and Japanese tobacco businesses.
On a reported basis, adjusted operating profit decreased 6.3 percent due to currency movements.
Total shipments increased as a result of acquisitions in Bangladesh and Russia. JT also reported market share increases in several markets, including France, Italy, Russia, Spain, Taiwan and the U.K.
“We began 2019 with strong results, delivering a 7.2 percent growth in adjusted operating profit at constant FX,” said Masamichi Terabatake, president and CEO of the JT Group.
“In conventional tobacco products, the platform of the group’s profitability, pricing remains robust both in the International and Japanese domestic tobacco businesses. We are confident that pricing will continue to be the main driver of our earnings growth. Our top-line was supported by acquisitions and positive cigarette market share gains in key markets as well as in Japan.”
Terabatake expressed confidence in the company’s reduced-risk products, including Ploom Tech+ and Ploom S, which the company launched in Japan in January.
“We received positive feedback from consumers and the new products are off to a good start. We will bring forward the nationwide sales expansion of Ploom Tech+ in mid-June. Our RRP portfolio including Ploom Tech, Ploom Tech+ and Ploom S serves the diversified needs of consumers, and we will be extending their roll out,” he said.
“In the International tobacco business, we also expanded our Logic portfolio with the introduction of Logic Compact in several markets.”
Terabatake added that the company is well-positioned to achieve its full-year currency “neutral adjusted” operating profit target, while remaining committed to invest in both conventional tobacco and reduced risk products for its mid-to long-term growth objective.