Japan Tobacco again lowered its forecast for domestic tobacco business profit this year, saying the shift to vapour products has had a stronger than expected impact on sales volume of traditional cigarettes

Adjusted tobacco operating profit in its home market should be JPY 5 billion (EUR 38 million) less at JPY 225 billion for the full year, the Tokyo-based company said. The new projection represents a 13.5 per cent or JPY 35.2 billion drop from last year’s reported tobacco business profit. JT last cut its forecast in August, when it announced a JPY 14 billion reduction in expected domestic tobacco business profit.
Domestic volume fell nearly 12 per cent in the nine months to 30 September to 70.3 billion sticks. Total industry volume in Japan declined by a similar 11.8 per cent to 115.3 billion sticks, JT said. Adjusted operating profit fell 10.6 per cent to JPY 178 billion in the nine-month period.
Outside Japan, full-year volume at Japan Tobacco International at 398 billion sticks will be seven billion sticks higher than by this year due to the acquisition of Mighty Corp in the Philippines. However the forecast for global flagship brands was cut by 2 billion sticks to 286 billion sticks, JT said. Third-quarter JTI volume rose 0.3 per cent to 104.8 billion sticks. Favourable foreign currency movements boosted adjusted operating profit 12.4 per cent to USD 1 billion (EUR 858 million).
“The continuing cigarette industry volume decline puts further pressure on our Japanese tobacco business, resulting in adjustments to our forecast,” said JT Chief Executive Mitsuomi Koizumi. “In the meantime, our tobacco vapour product, Ploom Tech, continues to be well received by consumers. We are increasing the production capacity as we prepare to expand our sales areas nationwide in the first half of 2018.”