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London - British American Tobacco [JSE:BTI] the world’s second-biggest cigarette maker, lifted sales by 7% in the first nine months of the year on the back of sharp price rises and recovering volumes in the third quarter.
The London-based maker of Kent, Dunhill, Lucky Strike and Pall Mall cigarettes said a good performance from these top four brands would help drive “another year of good earnings growth”.
“While the challenging economic conditions continue to impact consumers in some markets, other markets are showing signs of recovery,” said CEO Nicandro Durante in a nine-month trading update on Wednesday.
The group added that some of its major markets such as Russia, Nigeria, France, Germany, Romania and Pakistan were recovering, while others like Turkey, Canada and South Korea were still tough.
It reported underlying cigarette volumes rose 1% in the third quarter, meaning that volumes in the first nine months were only down 0.4%, better than the 1% fall seen in the first six months of 2011.
BAT shares edged 0.3% higher to 2.860 pence by 07:25 GMT in a slightly lower London market, as analysts highlighted the recovery in the third quarter and the confident outlook.
“We are making no changes to our estimates, but our confidence in those estimates is further enhanced,” said analyst Rae Maile at brokers JP Morgan, who is looking for a 10% rise in earnings per share to 193.32p for 2011.
Overall group volumes fell 0.6% to 523 billion cigarettes in the first nine months.
But the volume increase at its key four brands was 8%, with Kent up 9%. Sales grew in the top 10 markets, especially Russia, Romania and Ukraine.
The world’s biggest cigarette group, Marlboro-maker Philip Morris International, last week reported underlying third-quarter volumes rose 4.4% with sales up 15.7%, while Imperial Tobacco expects its cigarette volumes to fall 2% for its year to end-September.
BAT shares have outperformed the FTSE 100 by about 24% and European food and beverage stocks by 17% since the start of 2011.
The London-based maker of Kent, Dunhill, Lucky Strike and Pall Mall cigarettes said a good performance from these top four brands would help drive “another year of good earnings growth”.
“While the challenging economic conditions continue to impact consumers in some markets, other markets are showing signs of recovery,” said CEO Nicandro Durante in a nine-month trading update on Wednesday.
The group added that some of its major markets such as Russia, Nigeria, France, Germany, Romania and Pakistan were recovering, while others like Turkey, Canada and South Korea were still tough.
It reported underlying cigarette volumes rose 1% in the third quarter, meaning that volumes in the first nine months were only down 0.4%, better than the 1% fall seen in the first six months of 2011.
BAT shares edged 0.3% higher to 2.860 pence by 07:25 GMT in a slightly lower London market, as analysts highlighted the recovery in the third quarter and the confident outlook.
“We are making no changes to our estimates, but our confidence in those estimates is further enhanced,” said analyst Rae Maile at brokers JP Morgan, who is looking for a 10% rise in earnings per share to 193.32p for 2011.
Overall group volumes fell 0.6% to 523 billion cigarettes in the first nine months.
But the volume increase at its key four brands was 8%, with Kent up 9%. Sales grew in the top 10 markets, especially Russia, Romania and Ukraine.
The world’s biggest cigarette group, Marlboro-maker Philip Morris International, last week reported underlying third-quarter volumes rose 4.4% with sales up 15.7%, while Imperial Tobacco expects its cigarette volumes to fall 2% for its year to end-September.
BAT shares have outperformed the FTSE 100 by about 24% and European food and beverage stocks by 17% since the start of 2011.
