Japan Tobacco Inc. (OTCPK:JAPAY) Q2 2025 Earnings Call July 31, 2025 4:00 AM ET
Company Participants
Hiromasa Furukawa – Senior VP, CFO & Corporate Communications
Nobuya Kato – Executive VP & Deputy CEO
Conference Call Participants
Fujiwara – Unidentified Company
Haruka Miyake – Morgan Stanley, Research Division
Hiroshi Saji – Mizuho Securities Co., Ltd., Research Division
Makoto Morita – Unidentified Company
Takashi Miyazaki – Goldman Sachs Group, Inc., Research Division
Tsukasa Furuta – Unidentified Company
Hiromasa Furukawa
Good afternoon. I am Hiromasa Furukawa, CFO of the JT Group. Thank you very much for coming to the investor meeting.
I will begin by explaining our six months consolidated results for FY2025. Please see slide four.
As shown on the slide, revenue and AOP increased strongly, both on a constant FX and on a reported basis. AOP at constant FX, our primary performance indicator, increased by an impressive 24.7% YoY, driven by a strong organic performance that was boosted by the contribution of the Vector Group in the US, which we acquired last year. The foreign exchange impact on AOP remains negative due to the appreciation of the Japanese yen from Q2 onward. This has led to the depreciation of major currencies and of several emerging market currencies against the Japanese yen.
Operating profit increased by 10.9% YoY, driven by the increase in AOP. The increase was partially offset by impairment losses related to the transfer of the pharmaceutical business and higher amortization costs of intangible assets related to the Vector acquisition, both of which were included in the adjusted items. Profit increased by 4.8% YoY, driven by the increase in operating profit, which exceeded higher financial costs and higher corporate income tax expenses.
Moving on to the results of each business segment, starting with the tobacco business. Please see slide five for the
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