Japan Tobacco Operating Profit Falls on Weak Sales, Russia Ruble
Japan Tobacco Inc.’s first-quarter operating profit declined 8.4 percent as domestic cigarette sales fell and the weakness of the Russian ruble hurt earnings from its biggest overseas market.
Operating profit was 143.4 billion yen ($1.2 billion) for the three months ended March 31, compared with 156.6 billion yen for the same calendar period last year, Asia’s largest listed cigarette maker said in a Tokyo Stock Exchange statement.
Japan Tobacco provided a first-quarter “like-for-like” comparison as it is shifting to a new accounting period to match the calendar starting this year.
International sanctions against Russia over the worsening Ukraine crisis has weakened the ruble, eroding the value of Japan Tobacco’s profit when converted into dollars at its international unit.
At home, Japan Tobacco’s cigarette sales during the first quarter dropped 16 percent from a year earlier, according to the company data, as a surge in demand before an April 2014 sales tax increase disappeared.
Net income grew 17 percent to 104.2 billion yen due to lower income taxes, the company said.
Japan Tobacco has agreed to buy Logic Technology Development LLC, a U.S. e-cigarette brand, it said in a separate statement today, without disclosing any financial details.
Bloomberg News, edited by ESM