British American Tobacco Revenue Down

(RTTNews) - British American Tobacco plc (BATS.L, BTI) reported Wednesday that its nine-month revenue declined 6.5 percent from the previous year on current exchange rates with weak cigarette volume. At constant rates of exchange, revenues grew 4.2 percent with continued strong pricing.

Looking ahead, Nicandro Durante, Chief Executive, said, "Performance will moderate in the final quarter partly due to a strong comparator and the impact of the deterioration in exchange rates. There will be increased marketing investment and geographic expansion of next generation products in Q4, however I remain confident that we are on track to deliver another year of good earnings growth at constant rates of exchange."

In its interim management statement for the nine months ended September 30, the company said that total tobacco volume fell 2 percent year-over-year to 515 billion, and cigarette volume from subsidiaries decreased 1.8 percent to 487 billion, a lower rate than the overall market decline. All regions recorded weak volumes in the period.

In its third quarter, tobacco volume remained flat at 171 billion, and cigarette volume went up 0.4 percent as growth in Western Europe and EEMEA more than offset declines in Americas and Asia- Pacific.

The five Global Drive Brands grew volume by 7.2 percent in the nine months, with 9.5 percent growth in the third quarter.

The company noted that the trading environment remains challenging due to the slower than expected recovery in the global economy, continued pressure on consumer disposable income as well as significant currency headwinds.

If exchange rates stay the same for the remainder of the year, it would have adverse transactional and translational foreign exchange rate impacts to operating profit of approximately 6 percent and 12 percent respectively. Pricing conditions are improving globally despite certain markets, notably Australia, remaining challenging, the company noted.

In London, BAT shares were trading at 3,866 pence, up 1.91 percent.