July 31 (Bloomberg) -- Japan Tobacco Inc., Asia’s largest listed tobacco maker, said first-quarter profit rose 16 percent as price increases and the weaker yen boosted overseas profit.
Net income was 98.1 billion yen ($998 million) for the three months ended June, an increase from 84.5 billion yen a year earlier, the company said in a statement yesterday.
Japan Tobacco, seller of the Mevius brand, is benefiting as a weaker yen boosts the value of overseas revenue, which accounted for about 48 percent of the company’s total in the last fiscal year. The yen has fallen about 12 percent against the dollar this year as Prime Minister Shinzo Abe pushed for monetary easing and economic stimulus measures called Abenomics.
Overseas tobacco business sales rose 16 percent to 271 billion yen in the first quarter, the company said yesterday. It has increased prices in some markets including Russia and the U.K.
The company faces a decline in demand in its home market amid a shrinking population. The ratio of smokers in Japan fell 3.8 percentage points to 21.1 percent over the last three years, according to company’s website. Domestic tobacco sales fell 0.1 percent to 173 billion yen in the first quarter, according to yesterday’s statement.
Japan Tobacco has changed the name of its best-selling Mild Seven brand to Mevius amid tightening regulations worldwide. Expressions such as ’mild’ are forbidden on packaging in the areas of European Union, according to a company website.
Japan Tobacco’s shares have gained 42 percent this year, while the broader Topix index rose 34 percent.
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