British American Tobacco Plc, Europe’s largest cigarette maker, reported a 7.2 percent drop in earnings last year as growth was wiped out by currency shifts.
Adjusted operating profit fell to 5.4 billion pounds ($8.4 billion) from 5.82 billion pounds a year earlier, the tobacco firm said in a statement onThursday. Analysts had predicted 5.31 billion pounds, according to the average of 15 estimates compiled by Bloomberg.
BAT increased prices last year to combat weaker consumption amid stricter government restrictions on smoking, which will include plain packaging for cigarettes in the U.K. starting in May of 2016. That wasn’t enough to prevent a fall in earnings as currency moves -- particularly a stronger pound and a weaker ruble -- hurt results.
“We expect the trading environment to remain difficult in 2015, and that foreign exchange headwinds will continue to have a significant impact on both a transactional and translational level,” Chief Executive Officer Nicandro Durante said in the statement.
The results come days after BAT said it’s considering a $3 billion buyout of the minority in its Souza Cruz SA unit to take full control of the largest tobacco company in Brazil. The deal is still subject to approval by the BAT board and an independent evaluator, the company said in a statement.
Bloomberg News, edited by ESM
