• Sales Advance On Higher Cigarette Prices
  • British American Tobacco Plc (BATS) Europe’s largest cigarette maker, said first-quarter revenue
    rose as higher prices offset declining consumption.


    Pricing helped boost sales as shipments declined 2.4
    percent in the three months ended March 31, London-based BAT
    said in a statement today. Volume excluding acquisitions
    declined 1.8 percent. Organic revenue growth was 5 percent at
    constant exchange rates.


    The maker of Lucky Strike and Pall Mall cheap cigarettes said
    volume declined “significantly” in markets including Spain,
    Mexico, Australia and Vietnam in the quarter, though it
    increased its market share in those countries. The global
    cigarette market will probably shrink by 2.5 percent in 2011,
    Chief Executive Officer Nicandro Durante said on Feb. 24. His
    forecast excluded China which is largely closed to foreign cigarettes companies.
    “It’s a decent first-quarter update, and shows a good
    result compared to PMI last week,” Martin Deboo , a London-based
    analyst at Investec Securities, said by phone. He has a “buy”
    rating on the stock.

    Philip Morris International Inc. (PM) , the world’s largest
    publicly traded tobacco company, said April 21 that cigarette
    shipments excluding acquisitions fell by 3.3 percent in the
    first quarter. The company also raised its annual earnings per
    share forecast 20 cents to a range of $4.55 to $4.65, citing an
    improved business outlook and exchange rates. BAT shares fell as much as 0.2 percent and traded at 2,628
    pence, down 0.1 percent, at 9:08 a.m. in London The stock has
    climbed 6.4 percent this year.


    Australia’s government on April 7 proposed a law that would
    make the country the first to ban logos on cigarette packaging
    in a bid to combat smoking cigarettes. The measure would take effect in
    2012. BAT has a 42 percent market share in the country, the
    company said in February.


    BAT had “higher than expected” shipments to Japan, it
    said today, though “the environment remains highly uncertain”
    after the March 11 earthquake and tsunami.


    Supply-chain disruptions for Japan Tobacco Inc., the
    country’s market leader, boosted BAT’s shipments to Japan and
    the benefit will probably tail off as the year progresses,
    Michael Prideaux, a spokesman for the U.K. company, said by
    phone.


    BAT is also monitoring the market for possible
    acquisitions, Prideaux said, which will be “in the single-
    country nature.”