FX a drag at British American Tobacco

Cigarettes and tobacco maker British American Tobacco (BAT) said it has made a 'good start to 2013' after managing to increase revenues in the first quarter despite a slip in volumes.

Revenues grew by 5.0% at constant exchange rates in the three months to March 31st, which Chief Executive Nicandro Durante said was "good" amidst a backdrop of "fragile economic conditions persisting in many parts of the world".

At current exchange rates however, revenues were up by just 1.0%. Nevertheless, the firm said that if current exchange rates persist for the rest of the year, "the currency headwind that adversely impacted the quarter will reverse".

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BAT said that its Global Drive Brands of Dunhill, Kent, Lucky Strike and Pall Mall have seen continued growth with cigarette volumes up 1.0% year-on-year as market share grew strongly in the company's top 40 markets.

However, group cigarette volumes fell 3.7% to 160bn as growth in many markets (including Bangladesh, Pakistan and Vietnam) was more than offset by lower volumes in Brazil due to trade inventory movements, the leap-year comparator and market declines in Southern Europe.

Tobacco products meanwhile performed well during the quarter, with Fine Cut tobacco seeing strong growth in Western Europe.

Durante said: "We have grown revenue, our pricing momentum remains strong and our Global Drive Brands continue to perform well. It is a good start and I remain confident of another year of earnings growth in line with our long-term strategic goals."

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