Japanese Domestic Tobacco Business: Targeting 60% market share in March 2012. Volume declined due to the effects of the tax and price increase and the earthquake.
International Tobacco Business: Solid profit growth driven by strong pricing and GFB shipment volume increase. Market share2 gains in all key markets.
Consolidated Forecast: Upwardly revised adjusted net sales, EBITDA and net incomeforecasts. EBITDA and net income are forecast to grow year on year.
Results for the 9 months ended December 31, 2011
Adjusted net sales decreased by 1.3% due to the volume decline of the Japanese domestic tobacco business. EBITDA increased by 9.5% as a result of improved margins in the domestic and international tobacco businesses. Net income grew 33.7% due to improved nonoperating profits and losses.
Japanese Domestic Tobacco Business increased EBITDA by 14.6% because of improved margin and lower sales promotion expenses in the first half of this fiscal year. Adjusted net sales decreased 4.2% due to the volume decline following the October 2010 tax and price increase and the March 2011 earthquake. Market share is steadily recovering from the effects of the earthquake, attaining 59.1% in December 2011.
International Tobacco Business continued to grow, with EBITDA and core net sales increases of 17.3% and 12.8% respectively in US dollars driven by strong pricing, GFB shipment volume and favourable currency exchange movements. At constant rates of exchange, EBITDA and core net sales increased 13.5% and 8.4% respectively.
Forecast for the fiscal year ending March 31, 2012
The adjusted net sales, EBITDA and net income forecasts have been revised upwards, reflecting an increase in the domestic tobacco sales volume forecast and the favourable currency movements in the international tobacco business. Year-on-year, EBITDA, operating income and net income are now forecast to grow 5.6%, 9.5% and 30.0% respectively. The company’s board is recommending a fiscal year-end dividend payment of ¥5,000 per share, making a total annual dividend of ¥9,000 per share, compared with ¥6,800 in the previous fiscal year.