British American Tobacco (BAT), the world's second largest tobacco company, warned on Wednesday against the prospect of a more pronounced decline in cigarette sales worldwide, mainly because of the decline in demand in the United States, its main market, which makes the stock fall on the London Stock Exchange.
BRITISH AMERICAN TOBACCO PREFERS TO INVEST IN E-CIGARETTE
This warning highlights the challenges facing the tobacco industry as smokers, particularly in the United States, turn to less harmful alternatives such as electronic cigarettes and vaping products.
British American Tobacco (BAT), owner of the Lucky Strike and Dunhill brands, said he expects global industry volumes to fall by about 3,5% this year, while he previously estimated the decline at 3%. Yesterday, the title lost about 5% in the afternoon, red flag of the London index FTSE 100 (-0,58%).
"There are some profit taking but the title still suffers from wider changes in the sector", said David Madden, analyst at CMC Markets. "The group will need to reinforce its vaping sales in order to dispel the more general negative sentiment."
BAT said it would invest in what it calls its "new category", whose revenue growth is approaching its annual target range, which analysts have interpreted as a sign of some weakness in this activity.
CHINA NATIONAL TOBACCO WINS FROM ITS STOCK MARKET ENTRY!
The international branch of Chinese tobacco giant China National Tobacco took more than 10% when it was listed in Hong Kong. China is by far the largest producer of cigarettes in the world, with 2.368 billion units per year. The sector is in upheaval with the rise of electronic cigarettes.
Source : Reuters.com/ - Lesechos.fr/
