British American Tobacco has raised its revenue forecast for 2020 to the upper end of its prior expectations, thanks to a smaller-than-feared hit to cigarette demand from the COVID-19 pandemic.
The company said the sales impact from the health crisis would be about 2.5%, down from the 3% it had expected earlier.
The tobacco industry has weathered the pandemic relatively well as lockdowns and travel curbs often allowed for more time to smoke, more money to spend on cigarettes and fewer opportunities to smuggle tobacco.
"Throughout 2020, our priority has been the health and wellbeing of our employees," commented Jack Bowles, chief executive. "COVID-19 has made this a difficult year for everyone, and I am proud of the continued commitment and dedication of our people around the world. It is their hard work that has ensured we are on track to deliver a strong set of results in 2020, given this backdrop."
Other big tobacco firms, including Philip Morris International, Japan Tobacco Inc, Imperial Brands and Swedish Match, have also raised their 2020 forecasts.
Ahead Of Forecasts
The world's second-biggest cigarette maker, with brands like Dunhill and Rothmans, expects adjusted revenue growth on a constant currency basis to be at the upper end of its previous forecast of 1% to 3% in 2020.
In the United States, BAT's biggest market, it expects industry volume to be largely flat. The company had in July revised its U.S. industry volume forecast to be down 2.5% this year, from down 4% earlier.
The company, which also owns vapour product brand vype, maintained its annual growth forecast for adjusted earnings per share at mid-single-digit.
“We are transforming our business in order to build A Better Tomorrow," Bowles added. "Reducing the health impact of our business through providing a range of enjoyable and less risky products is the greatest contribution we can make to society. We continue to be clear that combustible cigarettes pose serious health risks, and the only way to avoid these risks is not to start or to quit."