BAT earnings helped by favorable forex rates |
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Thu, 27 Jul 2006 13:05
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LONDON: Cigarette maker British American Tobacco Plc. posted a 20 per cent rise in first-half earnings Thursday as the company said it benefitted from favourable foreign exchange rates.
BAT, maker of cigarette brands like Lucky Strike, Kent, Dunhill and Pall Mall, said a stronger dollar and South African rand against the pound and shipments made in Japan and South Africa ahead of cigarette price rises helped it in consolidating profits.
The company's pre-tax profit rose to 1.4 billion dollar for the first half from 1.3 billion pounds in the same period in 2005, while sales increased to 4.8 billion pounds from 4.4 billion pounds.
The company's chairman Jan du Plessis said the results for the first six months have been flattered by significant foreign exchange gains, which are unlikely to continue, as well by the timing of shipments in some major markets, which will inevitably reverse during the third quarter.
BAT said it gained around 70 million pounds from currency translation.
Analysts expect the company to have its earnings in 2006 rise 10 per cent-plus to beat the company's own medium term estimate of "high single-digit" percentage annual earnings growth.
BAT said its subsidiary in Chile plans to acquire the 29.63 per cent stake it does not own in Chiletabacos SA. The stake is valued at 104 million pounds.
BAT is world No 3 cigarette maker. Altria Group Inc., which makes Marlboro cigarettes, is the world's largest traded cigarette maker. However, both Altria and BAT are dwarfed by China National Tobacco Corp., which produces more cigarettes than the two of them combined.
The company increased its interim dividend 12 per cent to 15.7 pence.
BAT shares were down 4 pence at 1,424.
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