Japan Tobacco Inc. profit rose in the first quarter as smokers stocked up on cigarettes before a planned price increase and the company gained on the sale of real estate assets.
Net income jumped about 40 per cent to 145.4 billion yen ($1.36 billion) in the first three months of the year, the company said Monday. Domestic sales volume rose 6.7 per cent.
Japan Tobacco raised prices 1 April of some brands, including Mevius in Japan, where the company said it has about a 60 per cent share of the market. The company also acquired rights to sell Natural American Spirit cigarettes outside the US earlier this year.
"In Japan, last minute demand before the price hike pushed up sales during the January-March period," Satoshi Fujiwara, an analyst at Nomura Securities Co., said Monday before the earnings announcement. "There will be a reactionary drop in the second quarter though, weighing on earnings in that period."
The company left its forecast for net income unchanged at 399 billion yen, compared with the 421 billion yen average of analyst estimates.
Sales volume jumped about 19 per cent in March alone, the company reported 15 April on a preliminary basis, as smokers bought early to avoid a planned 1 April price increase. Shipments dropped 29 per cent in the same month a year ago.
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