JAPAN
JT Group has released its 2018 financial results. Highlights include adjusted operating profit at constant FX increasing 8.9% year on year or 1.7% on a reported basis and strong performance in the international tobacco business which more than offset headwinds in the Japanese domestic tobacco business.
The group also forecasts that adjusted operating profit at constant FX is expected to increase by 2.4% or decrease 8.3% on a reported basis., and that total tobacco business will deliver mid to high single-digit profit growth on a currency neutral basis.
For the group’s international tobacco business, excluding currency movements and the impact of the one-time loss in the previous year, adjusted operating profit grew 14.3% driven mainly by pricing gains, notably in Russia and the UK. Total shipment volume grew significantly led by last year’s acquisitions in Bangladesh and Russia, and the three other markets where the group completed acquisitions in 2017.
JT also saw robust organic volume performance driven by increased GFB shipments and market share gains in established markets. For its domestic tobacco business, JT’s adjusted operating profit declined 10 % due to cigarette industry volume contraction. The cigarette industry volume declined but less than expected. Total market share including reduced-risk products recovered and the strengthened business foundation is expected to lead to profit growth in 2019.
Masamichi Terabatake, president and c.e.o. of JT Group, said, “In the international tobacco business, market share gains and strong pricing in key markets yielded outstanding performance which was supported by the positive impact of acquisitions. In the Japanese domestic tobacco business, we completed the nationwide expansion of Ploom TECH and solidified our leading position in cigarettes by increasing our market share.”