CORRECTION - Japan Tobacco April-Dec operating profit up 8.6 pct on overseas ops

CORRECTION - Japan Tobacco April-Dec operating profit up 8.6 pct on overseas ops

	Published : Thu, 08 Feb 2007 10:10 By : Agencies Print this Story

TOKYO (XFN-ASIA) - Japan Tobacco Inc's operating profit for the nine months to December was 8.6 pct higher than a year before, driven up by contributions from its tobacco operations overseas and cuts in costs, which more than offset a continuing decline in domestic sales, the company said.

Japan Tobacco logged operating profit of 273.4 bln yen for the nine months, having made an operating profit of 251.8 bln yen a year before.

Its net profit rose by 18 pct to 193.5 bln yen and its revenue by 2.5 pct to 3.64 trln yen.

Its tobacco operations overseas made operating profit of 70.9 bln yen, up from 59.6 bln yen a year earlier, on a rise in revenue to 408.5 bln yen from 355.8 bln yen.

In an effort to strengthen its overseas position, Japan Tobacco recently agreed to buy for 7.5 bln stg Gallaher Group PLC of the UK, the maker of Benson & Hedges and Silk Cut cigarettes and Hamlet cigars.

In its domestic tobacco operations, Japan Tobacco made an operating profit of 196.7, higher than its operating profit of 176.7 bln yen a year before, because of cuts in costs and the launch of an upmarket product with a wide profit margin.

The combined sales by volume of Japan Tobacco's own brands, such as Mild Seven, and imported brands, such as Camel and Winston, fell to 135.5 bln cigarettes from 147.2 bln a year earlier.

The company's food business made a higher operating profit in the nine months to December, but the losses of its pharmaceutical division widened.

For the fiscal year ending March 31, the company is now forecasting a operating profit of 318 bln yen, having previously forecast 308 bln yen, to take into account the benefits of cuts in costs and the stronger-than-expected performance overseas.

But its has lowered its estimate of revenue to 4.74 trln yen from 4.77 trln yen and cut its forecast of sales by volume to 174 bln cigarettes from 176 bln.

And it has reduced its estimate of net profit to 202 bln yen from 206 bln yen because it is setting aside an undisclosed amount to prepare for the acquisition of Gallaher Group.

(1 usd = 121.17 yen)

yasuhiko.seki@xfn.com