Japan Tobacco Inc. said Thursday its group net profit for the fiscal year that ended March 31 leaped 104.3 percent from the previous year to 75.3 billion yen due to improved profitability on the back of cost cuts and higher sales of its flagship brands.
Group pretax profit grew 10.6 percent to 173.23 billion yen and operating profit increased 15.4 percent to 188.96 billion yen on sales of 4.49 trillion yen, down 1.1 percent.
JT attributed the surge in net profit to a sharp decline in special losses after the company booked a loss of 31.38 billion yen for special retirement benefits the previous year.
The lack of such severance-related charges helped reduce the total amount of JT's extraordinary losses to 49.08 billion yen from the previous year's 88.53 billion yen on a consolidated basis.
JT said solid overseas sales of its "global flagship brands" -- such as Camel, Winston, Mild Seven and Salem -- notably in higher retail-price markets, helped improve profitability in its mainline tobacco business despite an overall downtrend in sales.
JT International SA, a JT affiliate controlling overseas sales, turned in a strong performance as net sales grew 27.3 billion yen to 691.3 billion yen, JT said.
Overall net sales in the tobacco business decreased by 43.5 billion yen to 4.13 trillion yen because of weak demand in the domestic market, which saw JT's market share drop 1 percentage point to 73.3 percent.
JT said it stopped production at three plants in March as part of its plan to close eight domestic manufacturing plants by the end of March 2005 in a bid to facilitate cost controls.
For the current year to March 2004, JT expects a group net loss of 20 billion yen due to special losses stemming from a change in accounting standards related to costs of pension payments.
Group pretax profit is forecast to edge up to 174 billion yen on sales of 4.58 trillion yen.