Japan Tobacco Inc said yesterday that overseas smokers helped boost net profit by 18 percent in the nine months to December despite a sales slump at home and giant purchase of British rival Gallaher.

The company however trimmed its net profit forecast for the full year, partly due to costs linked to the Gallaher acquisition and the effect of more Japanese cutting back on the habit, although it still expects a record performance.

Japan Tobacco, which is half-owned by the Japanese government, said net profit rose to 193.4 billion yen ($1.61 billion) in the three quarters to December.

Operating income was up 8.6 percent to 273.4 billion yen but sales inched up only 2.5 percent to 3.64 trillion yen, the company said.

Hiroshi Kimura, the president and chief executive officer, acknowledged that "we are facing a challenging operating environment in the domestic market".

Japan Tobacco said domestic sales tumbled 7.9 percent by volume as smokers lit up less often following a tax hike in July on cigarettes, which are still cheaper in Japan than in most major developed countries.

But its international tobacco business enjoyed a 9 percent boom in sales, led by growth in Russia, where Japan Tobacco sells the Winston and Mild Seven brands, and in Iran, Turkey and Ukraine.

Source: China Daily/AFP