British American Tobacco revenue hit by currency movements

British American Tobacco posted a drop in sales for the first nine months of the year as the company was hit by currency movements, which it expects to have an impact on operating profit for the year.

Revenue in the nine months ended 30 September was down 6.5% at current exchange rates, but up 4.2% at constant rates of exchange.

Year-to-date cigarette volume from subsidiaries fell by 1.8% to 487bn, while cigarette market share in key markets rose by 40 basis points.

Global Drive Brands cigarette volume grew by 7.2% in the year to date.

Chief executive Nicandro Durante said: “The group continues to perform very well, with a strong third quarter. Our excellent market share growth was driven by the exceptional performance of our Global Drive Brands whilst the increase in revenue, at constant rates of exchange, was due to strong pricing in the majority of our markets.

"Performance will moderate in the final quarter partly due to a strong comparator and the impact of the deterioration in exchange rates. There will be increased marketing investment and geographic expansion of next generation products in Q4, however I remain confident that we are on track to deliver another year of good earnings growth at constant rates of exchange."

The company said the trading environment remains challenging due to the slower-than-expected recovery in the global economy, continued pressure on disposable income worldwide and significant currency headwinds

It said that if exchange rates stay the same for the remainder of the year the group would have adverse transactional and translational foreign exchange rate impacts to operating profit of around 6% and 12% respectively.