 |
BAT 9-mth vols dip as recession still bites
The maker of Kent, Dunhill, Lucky Strike and Pall Mall said on Wednesday that although cigarette volumes dipped, revenue showed good growth helped by price rises, the weak pound and the purchase of PT Bentoel in Indonesia in June 2009, and it still saw a year of good earnings growth for 2010.
The London-based group said the volume decline was due to recent flooding in Pakistan, where an area the size of Italy remains under water, increased illicit trade in Romania, Turkey and South Africa and also tough trading in Germany.
The 3 percent dip in underlying volumes was below analyst forecasts for a fall of 2 to 2-1/2 percent and was similar to the 3 percent fall seen in first-half volumes.
"The challenging economic conditions, excise driven price increases and high unemployment have led to some softening of our volumes. The recession's impact on consumers is still with us and shows no signs of abating," said Chief Executive Paul Adams in a nine-month trading update.
BAT shares dipped 2 percent to 23.90 pounds by 0715 GMT in a lower London market, but analysts said there would be no major changes to earnings estimates with the consensus at 175.5p a share for 2010.
Analysts said the 3 percent fall in third-quarter volumes was in line with the world's largest listed tobacco group Philip Morris International Inc and better than Imperial Tobacco's 4 percent. The U.S. group earlier this month raised prices and its earnings forecast for 2010.
BAT spokesman Michael Prideaux said the group now expects underlying volumes to be down around 3 percent for the year due largely to Pakistan after earlier expecting its volume decline in the second half would be better than a 2 percent fall.
"We as an industry tend to be last in and last out of a recession," he said, explaining that smoking levels are closely linked to unemployment and there were no signs of unemployment coming down around the world.
Analysts said tobacco groups tend to rely more on price increases and cost savings to drive earnings rather than volumes, and this was emphasised by the group's move to start procedures to close its Lecce factory in southern Italy.
The group's overall volumes were down just 1 percent at 526 billion cigarettes, while its top four global brands saw volumes rise 8 percent helped by trade stocking ahead of an excise duty rise in Japan at the start of October.
|
||||||||||||||||||||||||||||||||||||||||||||||||||
| LALE KEMAL |  |
||
| State of Turkish media is hopeless | |||
| İHSAN YILMAZ |  |
||
| The game against Hizmet | |||
| SUAT KINIKLIOĞLU |  |
||
| Back to a barbarian age | |||
| CENGİZ AKTAR |  |
||
| This presidential system would lead Turkey to autocracy | |||
| HASAN KANBOLAT |  |
||
| Prime Minister Erdoğan heads for Kazakhstan | |||
| İBRAHİM ÖZTÜRK |  |
||
| Global crisis: towards ‘no-man’s land’ | |||
| PAT YALE |  |
||
| Talk talk | |||
| MERVE BÜŞRA ÖZTÜRK |  |
||
| Fine prisons vs. freedom | |||
| BÜLENT KENEŞ |  |
||
| How has resource-low South Korea ended up the world’s 13th-largest economy? | |||
| BERİL DEDEOĞLU |  |
||
| KKTC: a profile | |||
| YAVUZ BAYDAR |  |
||
| It’s a riot | |||
| JOOST LAGENDIJK |  |
||
| The discouraging sight of football wars | |||
| MARKAR ESAYAN |  |
||
| Soccer and democracy | |||
| AMANDA PAUL |  |
||
| New spring for Turkish-French relations? | |||
| ZAUR SHIRIYEV |  |
||
| Putin's return: a déjà vu presidency? (2) | |||
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||
