LONDON (Reuters) - British American Tobacco (BATS.L) expects good earnings growth this year despite the strong pound holding back its performance at the half-year after the world’s No.2 cigarette maker gained from price rises and strong emerging markets.
The London-based group, which makes Kent, Dunhill, Lucky Strike and Pall Mall cigarettes, said on Wednesday its half-year volumes were flat at 344 billion cigarettes while price rises pushed up its underlying sales by 4 percent.
Chairman Richard Burrows said despite global economic uncertainty and the adverse impact of exchange rates the group had performed well and he was upbeat for the full year.
“The underlying business continues to perform well and we are confident of another year of good earnings growth,” he said.
BAT, which made 705 billion cigarette last year, has seen smoking levels decline in Western Europe and North America, but has offset this by pushing up prices and seeing growth in emerging markets like Brazil, Mexico, Romania and Russia.
The company posted a 7 percent rise in half-year adjusted diluted earnings per share to 102.4 pence, in line with a consensus forecast of 102.5 pence according to a company-compiled survey of analysts.
The half-year dividend, set at one third of 2011’s full year level, rose 11 percent to 42.2 pence a share.
Rival Imperial Tobacco IMT.L reported on Tuesday that price rises offset volume falls as it lifted its revenues by three percent in the nine-month to end-June after it suffered in recession-hit Spain as well as Ukraine and Poland.
Reporting by David Jones; Editing by Mark Potter