Tobacco giant’s volumes down as Europe quits

 
Oliver Smith
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BRITISH American Tobacco yesterday reported revenues increased only 0.7 per cent in the nine months to 30 September, as trading was hit by adverse exchange rate movements and lower volumes in key European and Brazilian markets.

The world’s second largest private sector tobacco company said that worldwide volumes of cigarettes fell 3.2 per cent compared to the same period last year.

“The group continued its good performance against a backdrop of adverse exchange rate movements, lower industry volume and instability in some parts of the world,” said chief executive Nicandro Durante.

“We have grown revenue and market share, our pricing momentum remains strong and our global drive brands continue to perform well,” added Durante.

The company’s top brands, Dunhill and Pall Mall, saw volume growth of 9.6 per cent and 5.2 per cent respectively, while Lucky Strike’s volumes fell 5.3 per cent.

“Worries on the volume outlook, plus the lack of positive catalysts, keeps us neutral for now,” said Martin Deboo of Investec, which maintained its ‘hold’ rating for the tobacco company.

British American Tobacco recently launched its first e-cigarette in the UK, and said that sales are looking positive.

“During the period, the group launched its first next generation product, Vype, and early signs are encouraging,” said Durante on the e-cigarette product released in July.