April 28 (Bloomberg) -- British American Tobacco Plc, Europe’s largest cigarette maker, said first-quarter revenue rose as higher prices offset declining consumption.
Pricing helped boost sales as shipments declined 2.4 percent in the three months ended March 31, London-based BAT said in a statement today. Volume excluding acquisitions declined 1.8 percent. Organic revenue growth was 5 percent at constant exchange rates.
The maker of Lucky Strike and Pall Mall cigarettes said volume declined “significantly” in markets including Spain, Mexico, Australia and Vietnam in the quarter, though it increased its market share in those countries. The global cigarette market will probably shrink by 2.5 percent in 2011, Chief Executive Officer Nicandro Durante said on Feb. 24. His forecast excluded China, which is largely closed to foreign tobacco companies.
“It’s a decent first-quarter update, and shows a good result compared to PMI last week,” Martin Deboo, a London-based analyst at Investec Securities, said by phone. He has a “buy” rating on the stock.
Philip Morris International Inc., the world’s largest publicly traded tobacco company, said April 21 that cigarette shipments excluding acquisitions fell by 3.3 percent in the first quarter. The company also raised its annual earnings per share forecast 20 cents to a range of $4.55 to $4.65, citing an improved business outlook and exchange rates.
BAT shares fell as much as 0.2 percent and traded at 2,628 pence, down 0.1 percent, at 9:08 a.m. in London. The stock has climbed 6.4 percent this year.
Australia’s government on April 7 proposed a law that would make the country the first to ban logos on cigarette packaging in a bid to combat smoking. The measure would take effect in 2012. BAT has a 42 percent market share in the country, the company said in February.
BAT had “higher than expected” shipments to Japan, it said today, though “the environment remains highly uncertain” after the March 11 earthquake and tsunami.
Supply-chain disruptions for Japan Tobacco Inc., the country’s market leader, boosted BAT’s shipments to Japan and the benefit will probably tail off as the year progresses, Michael Prideaux, a spokesman for the U.K. company, said by phone.
BAT is also monitoring the market for possible acquisitions, Prideaux said, which will be “in the single-country nature.”
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