British American Tobacco PLC (LON:BATS) has said it expects full-year revenue to grow by 1%-3% despite the global cigarette and tobacco heated products (THP) industry volumes looking set to decline by 7%.
Posting its latest results, the FTSE 100-listed cigarette maker said industry volumes fell by 6% in the quarter to end-June as emerging markets were hit by government-mandated factory closures and sales restrictions, including in South Africa, Mexico and Argentina, as well as the severity and duration of coronavirus (COVID-19) lockdowns. Developed markets were largely unaffected, it added.
READ: BAT downgraded by Jefferies, while Imperial Brands gets price hike
Overall in the first half to end-June, BAT's revenue inched up by 1% to £12.2bn while profit before tax jumped 16% to £4.5bn due to lower employee benefit costs and reduced operating expenses.
The firm also said it remains committed to its 65% dividend pay-out ratio and is to pay the next quarterly distribution of 52.6p per share in August.
The company is also said it is estimating a positive outcome for the court hearing in its challenge to a sales ban in South Africa, now scheduled for August, which is currently hitting adjusted profit from operations by £25mln per month.
"Despite the miss, BAT is in an elite group of resilient businesses who have been able to grow sales, earnings and cash flow during the challenging Covid-19 period," analysts at Liberum commented.
Shares added 2% to 2,704.5p early on Friday.
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