LONDON: Japan Tobacco on Tuesday forecast a 3.9 percent rise in 2024 core revenue for its cigarette business, as higher prices and an increase in income from smoking alternatives offset a further decline in volumes of its traditional products. Is.
While Japan Tobacco also focuses on pharmaceuticals and processed foods, the bulk of its income comes from tobacco.
The maker of Benson & Hedges and Winston cigarettes said it expected market share of its key brands to continue to grow, which would help offset volume losses. Smoking rates have declined in some markets due to increasingly stringent regulation and increased awareness of health risks.
Japan Tobacco President and CEO Masamichi Terabatake said in its full-year results statement that traditional tobacco will remain the group’s profit engine, but it will also invest in expanding smoking alternatives such as vapes.
Like rivals, the company is looking to create new revenue as its traditional streams come under pressure. It focuses specifically on its heated tobacco device, the Plume X.
It has stepped up its efforts to introduce the device globally, and wants to make it available in 40 markets by 2026, up from 13 at the end of 2023.
It reported core revenue growth of 5.9 percent in 2023, just ahead of its guidance. Its adjusted operating profit also beat forecasts in the third quarter, rising 4.4 percent in constant currency.