UPDATE 2-BAT Q1 volumes dip, but on track for the year

* Underlying Q1 cigarette volumes fall 4 pct

* Says remains on track for the full year

* Sees solid revenue growth, helped by pricing

(Rewrites with further details and background)

By David Jones

LONDON, April 28 (BestGrowthStock) – British American Tobacco Plc
(BATS.L: ), the world’s No 2 cigarette maker, reported a 4 percent
fall in underlying first-quarter volumes but said price rises
led to good sales growth and it remains on track for 2010.

The London-based group, which makes Kent, Dunhill, Lucky
Strike and Pall Mall cigarettes, said on Wednesday that its
consumers were finding economic conditions difficult and volumes
suffered as a result of the decline in some markets.

Overall volumes dipped 1 percent to 168 billion cigarettes
in the first three months of 2010 hit by declines in key markets
such as Japan, Brazil, Russia, Romania and Turkey, but partly
offset by the acquisition of Indonesia’s PT Bentoel last year.

Despite falling cigarette volumes, Chief Executive Paul
Adams said that the company’s action to push up cigarette prices
had helped compensate and resulted in higher first-quarter

“There was continued pricing momentum and good growth in
market share, leading to solid revenue growth. We remain on
track for the year,” he said in a first-quarter trading update.

All regions saw volume declines after stripping out Bentoel
apart for the Americas which saw flat volumes, but all regions
saw revenue growth at constant currency rates while growth
benefitted further from the weakness of the pound.

The top four “global drive” brands saw volumes up 6 percent,
led by Dunhill up 24 percent helped by growth in Brazil.

BAT’s first-quarter underlying volume fall of 4 percent
compared to the world’s biggest cigarette group and
Marlboro-maker Philip Morris International (PM.N: ) which showed a
fall of 2.3 percent and world No 4 Imperial Tobacco (IMT.L: ) with
a 1.4 percent dip. [ID:nLDE63M1DL]

In February, BAT reported signs that global economies were
starting to improve as it posted a 19 percent rise in 2009
earnings, but group underlying cigarette volumes fell 3 percent
in 2009 hit by deteriorating economies and it said then they
were set to fall a further 1-1/2 to 2 percent in 2010.

BAT shares closed on Tuesday at 21.40 pounds.

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(Reporting by David Jones; Editing by Hans Peters)

UPDATE 2-BAT Q1 volumes dip, but on track for the year