Japan Tobacco (2914) Q2 2025 earnings summary

Executive summary

• Six-month consolidated revenue rose 12.7% year-on-year to ¥1,734.5 billion, with AOP at constant FX up 24.7%, driven by organic growth and the Vector Group (VGR) acquisition.

• Operating profit increased 10.9% to ¥479.9 billion, and profit attributable to owners rose 4.8% to ¥319.9 billion, despite impairment losses and higher amortization from acquisitions.

• Comprehensive income decreased 40.9% year-on-year to ¥467.8 billion, mainly due to lower exchange differences on translation of foreign operations.

• Early momentum for Ploom AURA and EVO in Japan, with device sales exceeding previous models by three times in the first three weeks and steady HTS share gains globally.

• Announced transfer of the Pharmaceutical Business to Shionogi & Co., Ltd. and sale of subsidiary TORII PHARMACEUTICAL CO., LTD.

Financial highlights

• Core revenue for Jan–Jun 2025: ¥1,724.5 billion (+14.2% at constant FX), reported revenue: ¥1,734.5 billion (+10.5%).

• AOP: ¥565.1 billion (+24.7% at constant FX), reported AOP: ¥539.9 billion (+19.2%).

• Operating profit: ¥479.9 billion (+10.9%), profit: ¥319.9 billion (+4.8%) year-on-year.

• Tobacco business core revenue: ¥1,552.5 billion (+11.5%), AOP: ¥556.1 billion (+17.8%).

• Processed food revenue: ¥76.7 billion (+2.9B), AOP: ¥2.6 billion (–1.8B); pharmaceutical revenue: ¥48.3 billion (+4.3B), AOP: ¥4.2 billion (+0.2B).

Outlook and guidance

• Full-year 2025 core revenue forecast revised upward to ¥3,286.0 billion (+8.4% at constant FX), AOP to ¥862.0 billion (+14.6% at constant FX).

• Operating profit forecast: ¥739.0 billion (+128.5%), profit: ¥494.0 billion (+175.6%).

• Free cash flow forecast: –¥112.0 billion, reflecting Canadian litigation settlement and higher working capital.

• Annual dividend per share forecast raised to ¥208.00, with interim dividend at ¥104.00; payout ratio set at 74.8–74.9%.

• The group targets high single-digit annual average growth in adjusted operating profit at constant FX through 2027.