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Jump to full article: The Wall Street Journal Interactive Edition, 2009-10-28
Author: Lilly Vitorovich and Michael Carolan Of DOW JONES NEWSWIRES
Intro: British American Tobacco PLC (BATS.LN) said Wednesday its revenue growth remained strong in the first nine months of the year, despite a further softening in volumes in the third quarter, as smokers struggle with a tough global economy and rising unemployment.
The tobacco group said revenue grew strongly in the nine months to Sept. 30, driven by good pricing momentum, the contribution from acquisitions in Denmark, Turkey and Indonesia as well as favorable exchange rate movements. No specific revenue figures were released.
While volume rose 2% to 533 billion cigarettes in the nine-month period, this was wholly a result of acquisitions. Stripping out these acquisitions, volumes fell 3% in the nine months, compared with a 2% decline in the fist six months of the year.
"Volumes are undoubtedly softening," said the group's director of corporate and regulatory affairs Michael Prideaux, "but it probably look worse than it is."
He said the volume fall was largely a result of BAT's decision not to support low-margin brands bought last year as part of its Tekel and ST acquisitions in Turkey and Denmark.
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