British American Tobacco Plc, the maker of Lucky Strike and Pall Mall cigarettes, reported earnings near analysts’ estimates, helped by sales in western Europe.
Adjusted profit from operations was 2.45 billion pounds ($3.2 billion) in the first half, the London-based company said in a statement Thursday. Analysts expected 2.49 billion pounds.
“With profit growth weighted to the second half of the year, we remain confident that we will deliver another year of good earnings growth at constant rates of exchange," Chairman Richard Burrows said in the statement.
BAT has become a haven for investors betting that weaker sterling will help mitigate adverse currency movements that have dragged the company’s profit lower for four consecutive years. Meanwhile BAT and its competitors are losing a battle against European regulators, who are paving the way for plain packaging on cigarettes.
BAT proposed raising its interim dividend 4 percent to 51.3 pence per share.
Translating earnings from abroad back into pounds will give a 4 percent boost to full-year earnings, though the effect of buying tobacco in dollars and selling in many emerging markets will hurt profit by 6 percentage points. Previously, BAT forecast a 3 percent boost for the former and a 7 percent drag from the latter. The company said it doesn’t see a material effect from the U.K.’s vote to leave the European Union.
Reynolds American Inc., in which BAT owns a 42.2 percent stake, this week reported earnings of 58 cents per share, slightly below analysts’ estimates.
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