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UPDATE 1-Price rises put BAT on track for year of earnings growth

Wednesday, 23 Oct 2013 | 2:43 AM ET

LONDON, Oct 23 (Reuters) - British American Tobacco said it remained on track for a year of solid earnings growth after price rises in the first nine months of the year helped it to offset a 3 percent fall in total tobacco volumes.

The world's No.2 cigarette maker, whose brands include Kent, Dunhill, Lucky Strike and Pall Mall, said it had recorded revenue growth for the period to the end of September of 0.7 percent, year-on-year, at current rates of exchange.

Revenue at constant exchange rates grew by 3.5 percent, helped by the price increases. Movements in some of the firm's key trading currencies adversely affected the group.

The reduction in volumes was due to lower demand in Brazil, Russia, Turkey, Ukraine, Egypt and Western Europe, which offset the growing popularity of its brands in markets such as Bangladesh, Pakistan, Vietnam and the Middle East.

Of its brands, Dunhill and Pall Mall performed well while Kent and Lucky Strike fell in terms of volumes.

"The group continued its good performance against a backdrop of adverse exchange rate movements, lower industry volume and instability in some parts of the world," Chief Executive Nicandro Durante said.

"We remain on track for a year of solid earnings growth."

To counter the number of people who want to give up smoking around the world, BAT like other cigarette groups has introduced an electronic cigarette - a battery-powered metal tube that turns nicotine-laced liquid into vapour.

BAT said it had seen encouraging signs for its version of the new cigarette, called Vype.