Japan Tobacco suffered last year from the decline in sales of tobacco products in Japan. Consequently, the group decided to act. The company has set its sights on the international market, and is notably counting on the food and pharmaceutical industries to improve its 2018 earnings.
On the whole in 2017, Japan Tobacco posted a net profit of 392.4 billion yen (about 2.9 billion Euros). The losses are measured at 6.9% compared to 2016. The group, however, was hoping for a profit of 402 billion yen in early 2017, which was already less than the 2016 earnings (421.7 billion yen). Japanese Tobacco attributed this drop to the decline in tobacco sales in Japan. The losses were not mitigated, either, by the rise in international tobacco sales or pharmaceutical investment activities.
Become a leader in Japan in limited risk products
The CEO of the group, Masamichi Terabatake, said that to increase profits in 2018, by 2020 Japan Tobacco wants to become the #1 producer of limited risk products, such as e-cigarettes, heated tobacco, etc. In order to achieve this, he plans to accelerate the company’s investments in e-cigarettes. The company has been testing Ploom Tech, a heated tobacco device, since 2017.
At the same time, the group is looking to pursue its geographical development of traditional tobacco. While it anticipates a drop in sales in 2018, the company is looking to increase its revenue by 3.8%. It is also predicting a net profit of 394 billion yen, a .4% increase from 2017.