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BAT faces currency 'headwind' in 2018
(WebFG News) - British American Tobacco said it faced a currency "headwind" this year that will hit profits.
At the company's annual general meeting, chairman Richard Burrows said trading was challenging but the group was on track for good earnings growth excluding currency swings.
Burrows said: "Foreign currency exchange rates are a headwind for the business this year. If rates were to stay at current levels, the group would face a translational foreign exchange headwind of 7% on organic operating profit and 8% on earnings per share."
The FTSE 100 company's chairman said profit growth would be skewed to the second half of the financial year because of the phasing of shipments and pricing in markets such as Russia and the Gulf.
BAT, whose cigarette brands include Dunhill and Lucky Strike, said it would increase investment in e-cigarettes and other "next generation" products for smokers. It bought Reynolds for £42bn in 2017 partly to pool resources for those products.
Burrows said: "The group has decided to further increase investment plans behind next generation products during 2018, with a significant number of roll-outs and launches planned towards the end of Q3. And although trading conditions remain challenging, the group remains on track for another good year of earnings growth, excluding the impact of currency translation."