Japan Tobacco Inc. said Wednesday its fiscal-half group net profit grew 46.1 percent from a year earlier to 52.06 billion yen, thanks to cost cuts and brisk overseas sales of higher-end cigarettes.
The jump in earnings came despite flat sales growth, which inched up 0.8 percent to 2.3 trillion yen in the six months to September.
Consolidated operating profits came to 114.39 billion yen, a 29.7 percent increase from a year ago.
According to the company, which is majority owned by the government, 118.7 billion cigarettes were sold domestically in the period. That's 3.3 billion fewer than one year ago. In value terms, the figures translate into a year-on-year decline of 22.2 billion yen to 1.77 trillion yen.
The worsening conditions for the domestic tobacco market have prompted the firm to streamline its operations. It announced in July the closure of eight domestic plants.
However, overseas cigarette sales enjoyed steady growth, logging a 45.4 billion yen rise to 349.1 billion yen due to strong sales in the higher-end brand category, including Camel, Winston, and Mild Seven. This pushed up operating profits because of fat profit margins.
Group operating profits for the entire tobacco operation stood at 126.3 billion yen, an increase of 24.1 billion yen from a year ago.
The pharmaceutical division remained in the red, posting group operating losses of 7 billion yen during the period, with the firm blaming declining royalties from its anti-HIV drug Viracept.
For the full year to March, the firm projects group net profit of 70 billion yen on revenue of 4.51 trillion yen.