Total shipment volume at Japan Tobacco International (JTI) for the January-March period increased by 7.3 per cent, driven by acquisitions in Indonesia, the Philippines and Ethiopia, parent company Japan Tobacco (JT) said in its first quarter earnings report.

JT said its international tobacco division shipped 98.4 billion sticks in the three month period, an increase of 7.3 per cent over the 91.7 billion sticks shipped in the first quarter of 2017. Core revenue from international cigarette sales, at USD 2.724 billion (EUR 2.235 billion), was up 12.1 per cent, and JTI’s adjusted operating profit for the period was up 9.9 per cent, at USD 890 million, JT said.
Excluding volume gains from acquisitions, and favourable inventory movements, JT said total international shipment volume declined by 2.2 per cent. JTI shipped more cigarettes to Iran, Romania, Spain, Turkey and emerging tobacco markets, but these volume increases had little impact in offsetting industry volume contraction seen in markets such as France, Russia and Taiwan, JT said.
Shipments of JTI’s global focus brands (GFB) increased by 3.1 per cent to reach 62 billion sticks.
Total shipment volume for Turkey was up 5.4 per cent on first quarter 2017 results, with Winston and Camel volumes driving GFB shipments up 8.4 per cent. Shipment volumes in Iran grew by 8.6 per cent and JTI shipped 15.6 per cent more of its GFB sticks to the country than it did in the corresponding quarter last year. Total shipment volume in Taiwan declined by 18.7 per cent, due to a fall in industry volume following June 2017 tax increases, JT said. Shipment of GFB sticks in Taiwan decreased by 21.8 per cent, with Winston and Mevius volumes both slipping.
GFB shipments in Russia increased by 4.1 per cent, mainly driven by volume growth of the LD brand, while total shipment volume in the country was down 4.4 per cent, due to an estimated industry volume contraction of 8.8 per cent in the three month period, JT said.
JT said core revenue from domestic tobacco sales in Japan, at JPY 129.3 Billion (EUR 986 Million), was down 10.1 per cent on first quarter 2017 results. JT said industry volume contracted by 15.6 per cent in the country over the three month period and its total domestic volume was down 15 per cent, at 19.5 billion sticks.
The cigarette maker said it would expand the sales area of its Ploom Tech heated tobacco product, including to convenience stores as of July, and is aiming to launch a new heated tobacco product later this year, or early in 2019.
JT’s president and CEO, Masamichi Terabatake, commented, “Our traditional tobacco products, the platform of the Group’s profitability, delivered robust top-line growth led by pricing in the international tobacco business. We also increased our market share in the Japanese domestic tobacco business driven by Mevius. M&A activities last year contributed to our top-line growth following our strategic geographical expansion. Our recent decision to acquire Donskoy Tabak companies will reinforce our No.1 position in Russia after the closing.”