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".

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."