BRITISH American Tobacco (BAT) has become the latest UK company to have its performance hit by sterling’s rise in value as it reported a drop in revenue and profit during the six months to 30 June. Both the strength of the pound and a slight decline in volumes took a toll.
Excluding the impact of foreign exchange rates, the world’s second largest tobacco company by sales cited improved market share for its Rothmans, Pall Mall and Dunhill brands and strong performance in Indonesia and Mexico.
“BAT performed well during the first half of the year but, as expected, results were affected by the strength of sterling,” said BAT chairman Richard Burrows.
Revenue fell 10 per cent to £6.8bn during the period while adjusted profits at current exchange rates fell nine per cent to £2.66bn.
Sales volume in the global tobacco market are expected to shrink two to three per cent this year, hurt by economic weakness and a growing health awareness.
The first-half results follow the group’s downbeat first-quarter report in April when revenues had fallen 12 per cent.
BAT also increased its interim dividend by six per cent to 47.5p to be paid on 30 September. Shares fell 1.23 per cent to 3,523.50p.