Japan Tobacco (JT) said domestic volume will fall by about one quarter this fiscal year after higher cigarette prices cut demand and the March earthquake interrupted production and supply.

The company’s product line, reduced after the quake to the best selling items, will be permanently streamlined by eliminating 23 marginal products, JT said in a statement today.
Domestic volume in the fiscal year ending 31 March, 2012, is forecast between 100 billion and 108 billion sticks from 134.6 billion sticks in the fiscal year that ended 31 March, JT said. Cigarette price and tax hikes last October continue to negatively affect demand, JT said. A decline in domestic sales to between JPY 552 billion (EUR 4.75 billion) and JPY 598 billion is expected. Domestic sales for the year ended 31 March totalled JPY 617.9 billion.
“Following the earthquake the Japanese domestic tobacco business operating environment remains unclear,” JT said. More accurate forecasts will be made public when first-quarter results are announced, the company said. JT reported JPY 10.9 billion in costs related to the earthquake. 
After the 11 March quake and tsunami, JT announced a temporary halt to distribution. JT then said it would concentrate on its 25 best selling products. Today the company said it will increase the number of products to 73 by early August.Production of 23 marginal products will not be resumed, “due to small sales volume and anticipated acceleration in sales volume decline,” JT said.
International tobacco business in the coming fiscal year will bring a 2.9 per cent expansion in sales of major brands and 10 per cent rise in earnings before interest, tax, depreciation and amortisation (EBITDA), JT said. Total volume will be flat compared with the prior fiscal year.
For the year ended 31 March, combined sales excluding tax fell 1.2 per cent to JPY 1.957 trillion. EBITDA rose 2.7 per cent to JPY 541.1 million. JT forecasts for the current fiscal year peg sales ex-tax between JPY 1.925 trillion and JPY1.97 trillion, and EBITDA from JPY 540 million to JPY 574 million. (pi)