BRITISH American Tobacco (BAT)’s growth in emerging markets was cancelled out by a strong pound, as the cigarette maker saw a slight rise in profits in the first half of the year.
The world’s second largest tobacco firm, which makes Kent, Dunhill, Lucky Strike and Pall Mall cigarettes, said it expects continued earnings growth in the second half of the year as it makes inroads in eastern Europe and Asia.
The group sold 344bn cigarettes, flat on last year, although a price hike saw sales remain constant despite currency difficulties.
Developing markets now account for 60 per cent of BAT’s profits, making it the most globally spread of the big tobacco groups.
Revenue was £7.45bn, almost unchanged from last year, while net profit rose 3.2 per cent to £1.93bn.
Despite a seven per cent rise in earnings per share, BAT dipped in early trading, with the company’s exchange rate difficulties greater than expected and cigarette volumes in southern Europe down around 10 per cent due to economic woes and a weak euro.
Chairman Richard Burrows said: “Despite economic uncertainty and the adverse impact of exchange rates, BAT has delivered another good set of results. The underlying business continues to perform well and we are confident of another year of good earnings growth.”