In the financial report, JT said that revenue decreased 1.8 per cent to JPY 2,175.6 billion (USD 19.78 billion) due to a revenue decline mainly in the Japanese domestic tobacco business, pharmaceutical and processed food businesses. In the international tobacco business, the solid performance driven by price/mix contribution was offset by currency headwinds. Adjusted operating profit at constant FX increased 0.9 per cent to JPY 600.8 billion (USD 5.47 billion). On a reported basis, adjusted operating profit decreased 13.4 per cent to JPY 515.9 billion (USD 4.69 billion), mainly due to unfavourable currency movements in the international tobacco business. Operating profit decreased 11.1 per cent year-on-year to JPY 502.4 billion (45.7 billion) due to a decrease in adjusted operating profit, a decline in proceeds from sales of real estate assets, a higher trademark amortization, and recognition of restructuring costs related to the transformation in the international tobacco business.
Masamichi Terabatake, President and Chief Executive Officer of the JT Group, said: “Our consolidated adjusted operating profit at constant FX grew year-on-year, driven by growth in the tobacco business which exceeded the decline in the pharmaceutical business. We also secured our free cash flow delivery despite a profit decline due to unfavourable currency movements. To pursue sustainable profit growth, the JT Group’s Business Plan 2020 incorporates the lessons learned through our business operations. The tobacco business remains the core and the key driver of our profit growth. As the head of the tobacco business, I remain committed to its mid- to long-term sustainable profit growth and will encourage consumer centric and entrepreneurial mindset, while optimizing resource allocation, further enhancing collaboration across tobacco businesses and pursuing the total tobacco growth.”