August 20, 2013

Japan Tobacco Faces Marginal Decline

Japan Tobacco’s volume cigarette sales during the first quarter till the end of June, at 29.3 billion, declined by 0.2 % in comparison with the similar period in 2012.

Evaluating identical time periods, industry volume was reported to have dropped by 2.0 %; so JT’s market share rose from 59.6 % to 60.5 %. The share increase was led by sales of Mevius, famous cigarette brand previously known as Mild Seven, which was the issue of sales offers and new edition releases that contained Mevius Premium Menthol Option with a capsule filter.

JT’s consolidated final results for the 1Q included the data for Japan Tobacco International, which witnessed its shipments during January-March 2013, at about 92.6 billion, a decline by 6.4 % in comparison to those of January-March 2012, and 98.9 billion. Looking at similar periods, key cigarette brands shipments dropped by 4.5 % to 58.4 billion.

Even though volumes have declined JTI revealed that its year on year market share proceed to increase “in virtually all major markets, such as France, Italy, Spain, Turkey and the U.K.”
JT’s consolidated 1Q profit for all of its facilities, at ¥547.9 billion, increased by 7.0 % on that of the 1Q of 2012. Adjusted earnings before interest, tax, depreciation, and amortization, at ¥177.2 billion, grew by 13.6 % and operating revenue increased by 13.9 % to ¥146.5 billion. “We have produced a strong start to the coming financial year,” stated JT President and CEO Mitsuomi Koizumi. “Globally, a solid price forced ongoing revenue increase in spite of unfavorable volume caused by industry compression. For instance, in Japan, Mevius went on to push solid market share development, showing that the rebranding of Mild Seven to Mevius has been accomplished properly.

If looking into the future, in spite of a complicated business conditions, we are assured that we can accomplish the Business Plan 2013 objectives, seeking superior growth. At the same time, JTI claimed that its cigarette shipments within the first quarter declined by 3.9 % in comparison to those of the first quarter of 2012. On top of that, key cigarette brands shipments have fallen by about 0.3 % to 69.5 billion.