Japan Tobacco Faces Drop in Sales Volume

June 13th, 2011 09:27

Japan Tobacco’s sales within the 12 months at 134.6 billion, constituted 11.3 % lower than they were during the 12 months to the end of March 2010. If speaking about the sales volumes of the most recent years and of the previous year than it is possible to observe a significant drop, due to huge tax hike and JT price increase that happened on October 1 and also because of the horrible earthquake and tsunami that took place on March 11.

JT announced that its share of the domestic tobacco market had dropped from 64.9% to 64.1% within the periods of review and the share of key brands market had fallen from 45.1% to 44.5%. However they stated that these figures do not sufficiently reflect their products’ position in the cigarette market. JT representative underlined that in order to increase brand equity of its key brands, new tobacco products were launched within 12 months to the end of March and several packages were redesigned.

The domestic cigarette business profit during the 12 months at ¥212.9 billion has increased by 7.1% in comparison to that of the previous 12 months. Net proceeds including tax have increased by 2.0% to ¥3,103.3 billion and EBITDA was up by 2.6 % to ¥257.6 billion. Japan Tobacco’s shipment within 12 months till the end of December 2010, at 428.4 billion, dropped by 1.5% on that of the previous year, though JT declared that shipments during the last month of 2010 has raised by 2.2.%. The market share continued to grow in the majority of cigarette markets such as: France, Italy, Russia and Turkey due to adequate and appropriate trade marketing actions.

japan tobacco

The shipment of most popular brands at 249.8 billion has increased by 2.7% mostly driven by: Camel, LD, Mild Seven and Winston. “We have created a supply resumption schedule which is intended to expand the number of products available for shipment by no later than August 2011. But what concerns our commitment to produce qualitative brands it remains unchanged,” stated JT’s president Hiroshi Kimura.

“Our tobacco business abroad continues to develop a solid performance and increases our profits. The second part of the 2010 demonstrated signs of recovery with the share increase in the main cigarette markets.” “We will continue to pay main attention to innovation and top-line growth, striving for 10% increase in EBITDA.” At the same time recently JT declared that its shipments within the first three months of 2011, at 94.5 billion have raised by 0.5%, while GFB shipments, at 55.8 billion, increased by 2.1%.

Its basic net proceeding, excluding taxes has increased by 4.4% to US$2,447 million, and its basic net proceedings per thousand cigarettes, except taxes, raised by 3.9 % to US$26.1.

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