British American Tobacco reported a stronger-than-expected first-half profit on Friday, as the company sold more higher-priced cigarettes and saw strong demand for vaping products in the United States, its biggest market.
The Dunhill and Lucky Strike cigarette maker said consumption in the United States was "resilient" with the company increasing its share of the U.S. cigarette market by 30 basis points in the first half of the year.
Newport and Natural American Spirit cigarettes were among the top performers in the United States, chief marketing officer Kingsley Wheaton said, adding that revenue from e-cigarettes such as Vuse grew 75% in the first half.
The company also revised its forecast for U.S. industry volumes to be down 2.5% this year, from down 4% earlier.
"The U.S. had a very strong performance," Wheaton said, adding that 3 million more U.S. consumers had tried BAT products since the start of the year.
Overall, in developed markets, where the company makes 75% of its revenue, there was "little evidence to date of accelerated down-trading" and the company also saw strong adoption of its tobacco-heating-products (THP) glo in Japan and in Russia.
Total cigarette and tobacco heating products volume declined 6.3%, slightly better than the consensus forecast for a 6.5% drop, mainly due to COVID-related supply chain and production disruptions in markets such as South Africa and Mexico.
Adjusted earnings per share (EPS) came in at 157.8 pence in the first half with revenue at £12.27 billion. Both were higher than analysts' forecasts for EPS of 154.5 pence and revenue of 12.20 billion, according to Refinitiv Data.
The London-based company also kept its forecast for constant currency adjusted revenue growth of 1-3% and EPS growth in the mid-single digits for the full year.
BAT shares were up 0.8% in early trading on Friday.