Jump to full article: Bloomberg News, 2009-04-26
Author: Kiyori Ueno
Intro: Japan Tobacco Inc., the world's third-largest traded cigarette maker, forecast a 12 percent drop in profit this fiscal year as it expects domestic sales will decline.
Net income may fall to 186 billion yen ($1.56 billion) in 2007, while sales may increase 2.5 percent to 4.89 trillion yen, Japan Tobacco said in a filing to the Tokyo Stock Exchange today.
The Tokyo-based company completed on April 18 its purchase of Gallaher Group Plc, the maker of Benson & Hedges cigarettes in Europe, for 7.5 billion pounds ($15 billion). The earnings forecast for 2007 announced today does not include figures from Gallaher.
Domestic cigarette sales are in decline due to Japan's shrinking population and an upswing in health consciousness. A tax rise on cigarettes instituted in July also discouraged sales.
Japan Tobacco expects sales at home, which account for 70 percent of all revenue, will decrease 0.5 percent in the current year. In contrast, overseas sales will rise 13 percent to 1.1 trillion yen.
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