Strong price/mix in the international tobacco business and further depreciation of the Japanese Yen against the US Dollar were the key factors driving growth of 2.6% in revenue and 7.8% in adjusted operating profit. Adjusted operating profit at constant FX increased 10.6%.
Profit attributable to owners of the parent declined 12.2%, affected by one-off factors including expenses relating to measures to strengthen the competitiveness of the Japanese domestic tobacco business and to the proposed restructure of manufacturing facilities in Europe as well as lower gains from real estate asset disposals.
International Tobacco Business: Achieved double-digit earnings growth of 13.1% in US Dollars at constant FX through strong price/mix, more than compensating for the overall volume decline. On a reported basis, adjusted operating profit increased 1.1% affected by unfavorable exchange rates of local currencies against the US Dollar. In Japanese Yen, adjusted operating profit grew 8.8% due to the currency depreciation against the US Dollar.
Japanese Domestic Tobacco Business: A number of initiatives with the aim of strengthening the brand equity and retaining consumers facilitated the recovery of market share after the April consumption tax (VAT) hike. Adjusted operating profit grew 1.8% driven by the price/mix effect achieved through the consumer retaining initiatives and continuous cost improvement.
The Company’s Board is recommending a total dividend per share of ¥100, including a first half-year dividend per share of ¥50.