Japan Tobacco’s Push Abroad Offsets Weaker Domestic Demand
Japan Tobacco’s Push Abroad Offsets Weak Cigarette Sales at Home
(Bloomberg) -- Japan Tobacco Inc.’s spate of acquisitions overseas is helping to stem declines in cigarette sales at home.
Operating profit for the maker of Winston and Mevius cigarettes fell to 146.8 billion yen ($1.3 billion) in the three months ended March 31 compared with a year earlier, the Tokyo-based company said in a statement Tuesday. Still, that beat the 145.4 billion-yen average estimate of analysts compiled by Bloomberg.
Asia’s most-valuable cigarette maker has been on an acquisition spree, spending more than $3 billion in the past year to pick up companies in Russia, Indonesia and the Philippines. That’s helped ease the increasing pressure it faces as global regulations on smoking tighten and rivals challenged the company at home with competing high-tech smoking devices.
The company said profit decreased due to declining cigarette sales. That slide was partially offset by the growing demand for its smokeless tobacco product, Ploom Tech. Overseas, the company saw earnings gains in several key markets including Taiwan and Russia, even as demand in its home market of Japan waned.
The company plans to expand sales of its Ploom Tech device nationwide in Japan from June, a few months faster than previously reported.
To contact the reporters on this story: Lisa Du in Tokyo at ldu31@bloomberg.net, Maiko Takahashi in Tokyo at mtakahashi61@bloomberg.net.
To contact the editors responsible for this story: K. Oanh Ha at oha3@bloomberg.net, Subramaniam Sharma, Jeff Sutherland
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