British American Tobacco earnings rise

British American Tobacco (BAT, BTI) reported 4% growth in revenue at constant exchange rates for the nine months ended September 2012, despite the decline in the group. Revenue growth was driven by continued good price. Revenue decreased by 1%, the negative impact of the exchange rate and organic revenue growth in constant currency by 3%, the joint many said. Releasing her Interim Management on Wednesday, BAT said group volumes declined, after a low Q3, mainly due to decline in heavy industry and the comparator, although the effect is expected to moderate in Q4. Group volumes from subsidiaries were 517 billion, up 1.2%, while organic volumes were 1.8% lower as a result of decline in the industry and use in the comparative period of time increase the volume of sales in Japan. Industry volume was down in Brazil as a result of a significant increase in excise duty which led to an increase in illegal trade. The benefit for the group of volumes from the acquisition of protease in Colombia and increased sales in Bangladesh, Vietnam, Pakistan and the Gulf countries, was more than offset by a reduction in Brazil, Japan, Italy, Turkey and Egypt. Basic market share grew with strong performances in most of the top 40 markets. Chief Executive Nicandro Durante said the economic recovery remains fragile in this year and trading conditions remain difficult in many parts of the world. "However, prices remain high, we are growing major market share and our Global Brands Drive to continue to perform well. Trading activity of the Group is good and we are on track for another year of good earnings growth." BAT noted that the four Global Brands Drive continued their good performance and achieved overall volume growth of 3 percent. Kent was up slightly, growing in Russia, Ukraine and Azerbaijan, but nearly offset by a decline in Japan. Dunhill was 2 percent higher than last year, with good performances in the Gulf countries, South Africa, Romania and Indonesia, partly offset by the negative impact of competitive pricing in the activities of South Korea. Good performances in Pakistan, Romania, Russia and Canada, partially offset by lower volumes in Chile, Spain and Italy, contributed 2 percent increase Pall Mall. Lucky Strike has grown by 14 percent after a good growth in Poland, Germany, France, South Korea, Argentina and Chile. Other tobacco products are made very well, and market share grew strongly. Volume grew 8 percent to 10,739 tons Fine Cut in Western Europe, mainly in Germany, France, Hungary, the Netherlands, Spain and the United Kingdom. Pall Mall is the largest fine Cut brand in Western Europe. Looking ahead, the group said, the environment continues to be challenging, with industry volumes under pressure. In these conditions, the expansion of the illegal trade remains a threat, driven by excise increases and pressure on disposable income of consumers. BAT said it resumed market share repurchase programmed end of February 2012. In the nine months to September 2012, 30 million shares were purchased for a total of GBP978 million, excluding transaction costs.