British American Tobacco 9-month Revenue Hurt By Currency

(RTTNews) - British American Tobacco Plc. (BATS.L, BTI) Wednesday said it performed well during the first nine months of the year, but trading environment remains challenging. The company's revenue grew on a currency-neutral basis during the period, even as it dropped on reported basis.

The cigarette maker said it is on track to deliver another year of good earnings growth at constant rates of exchange.

In a trading statement for the 9 months ended September 30, the firm said revenue declined 9.6 percent at current rates of exchange. At constant exchange rates, revenue showed a 2.4 percent growth driven by good pricing.

Cigarette volume from subsidiaries slid 1 percent to 495 billion, while global Drive Brand cigarette volume grew 6.2 percent.

The drop in cigarette volume from subsidiaries occurred amid growth in many markets such as the Middle East, Bangladesh, Venezuela, Pakistan, Ukraine, Turkey and Indonesia. However, this growth was more than offset by lower volume in Russia, Vietnam, Brazil, Poland and Canada, due to industry decline.

The five Global Drive Brands' cigarette volume grew 6.2 percent, and their combined market share continued to grow strongly in key markets.

Dunhill's volume increased 3.5 percent, with good growth in Indonesia, Brazil and South Korea.

The company said trading environment remains challenging due to continuing pressure on consumer disposable income globally and the slow economic recovery in Western Europe.

Pricing is weighted to the second half of the year, although recent competitive pricing activity in some key markets, and the growth of the low price segment have led to some moderation of the improvement in price mix.

Nicandro Durante, Chief Executive, said, "Although currency movements impacted our reported results, the Group continues to perform well and we are on track to deliver another year of good earnings growth at constant rates of exchange."

The stock fell 1.7 percent on Tuesday to close at 3,406.20 pence.