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JT reports losses for third quarter

12 Nov 2019. Japan Tobacco has reported overall losses for Q3 2019, with adjusted operating profits dropping 15.2 per cent to JPY 163.7 billion (USD 1.5 billion), compared to JPY 193.2 billion (USD 1.7 billion) in Q3 2018, according to the company’s third quarter report.

JT’s revenue dropped by 4.2 per cent, to JPY 575.2 billion (USD 5.2 billion) compared to JPY 600.5 billion (USD 5.5 billion) in Q3 2018. JT attributes this decrease to a drop in Japanese domestic business ahead of the one off October 2019 consumption-tax-led retail price revision. Operating profit also decreased by 26 per cent, from JPY 174.8 billion (USD 1.6 billion) in Q3 2018 to JPY 129.3 billion (USD 1.1 billion) this quarter.

International shipment volume increased by 1.4 per cent with 116.1 billion units being shipped this quarter, compared to 114.5 billion units being shipped in Q3 2018. This increase was predominantly driven by acquisitions in Bangladesh and Russia. According to the report, this increase comes despite an overall industry decline. Quarterly market share gains increased across a range of territories, including Canada, France, Germany, Saudi Arabia and the UK. GFB shipment volume increased overall by 4.6 per cent, driven by the solid performance of the Winston, Camel and LD brands, whose shipment volumes increased by 4.4 per cent, 5.2 per cent and 8.3 per cent respectively.

Japanese domestic business saw an overall decrease, with cigarette sales volume dropping 15.7 per cent to 20.1 billion units, compared to 23.8 billion units in Q3 2018. Adjusted operating profit also dropped to JPY 56.2 billion (USD 515 million), a decrease of 18.9 per cent on Q3 2018’s JPY 69.3 billion (USD 635 million).

President and Chief Executive Officer of the JT Group, Masamichi Terabatake, said of the Q3 results, “In an increasingly evolving industry due to dynamic consumer needs, we must transform ourselves by embracing new ways of working and cultures. We are also implementing a number of initiatives focusing on our operational excellence to increase speed, agility and promote bolder actions. We believe that these initiatives will support our sustainable business growth.”