Japan Tobacco Lifts FY26 Guidance as H1 Operating Profit Jumps 29% to ¥645bn

Japan Tobacco Inc. (TSE: 2914), the maker of Mevius, Winston and Camel and one of the world's largest tobacco groups, reported consolidated results for the first half of the fiscal year to December 2026 — the six months from January 1 to June 30, 2026 — under IFRS. Revenue rose 17.7% to ¥1,986,070 million, operating profit jumped 29.0% to ¥644,940 million, profit before tax climbed 32.4% to ¥605,999 million, and profit attributable to owners of the parent surged 35.0% to ¥431,829 million. Basic earnings per share were ¥243.24, up from ¥180.19; diluted EPS was ¥243.22. Comprehensive income rose 16.1% to ¥543,292 million.

Tobacco does the heavy lifting

The tobacco business produced revenue of ¥1,905,593 million, up from ¥1,608,779 million a year earlier, and adjusted operating profit of ¥682,902 million against ¥544,920 million — a 25.3% advance. Revenue from JT's own brands rose 19.1% to ¥1,828,405 million from ¥1,534,808 million; in the prior-year half that base split into ¥753,692 million from the EMA cluster (Africa, the Middle East, Eastern Europe, Turkey, the Americas and all duty-free), ¥417,314 million from Asia and ¥363,802 million from Western Europe. Processed food, the group's second pillar, lifted external revenue 3.2% to ¥79,237 million and adjusted operating profit 58.5% to ¥4,070 million, with a further ¥1,240 million of other revenue and a ¥25,269 million corporate and elimination charge. Consolidated adjusted operating profit reached ¥661,721 million from ¥524,493 million, and on a constant-currency basis adjusted operating profit rose 19.4% to ¥626,147 million.

A reshaped comparison base

Two presentation changes sit behind the headline growth rates. JT transferred its pharmaceutical business to Shionogi and sold its shareholding in Torii Pharmaceutical, so that unit is now reported as a discontinued operation and the prior-year half is restated to continuing operations only — which is why the company shows no year-on-year percentage against the restated comparative rows themselves. Separately, from the first quarter of 2026 JT widened the definition of adjusted operating profit to also exclude the profit corresponding to the instalment payments under the settlement of smoking-and-health litigation in Canada, in which its local subsidiary JTI-Macdonald Corp. is a defendant. The prior period has been restated on the same basis.

Balance sheet and cash flow

Total assets stood at ¥8,669,953 million at June 30, up ¥250.7 billion from the December year-end, while total liabilities fell ¥56.9 billion to ¥4,246.9 billion. Total equity rose ¥307.7 billion to ¥4,423,050 million, of which ¥4,393,958 million was attributable to owners of the parent — lifting the equity ratio to 50.7% from 48.5% and taking book value per share to ¥2,474.86. Operating cash flow nearly doubled to ¥331.3 billion from ¥167.5 billion, the investing outflow narrowed to ¥58.4 billion from ¥132.0 billion, and financing absorbed ¥278.2 billion against ¥230.9 billion. Cash and equivalents ended the half at ¥827.9 billion, ¥3.2 billion below the level at the start of the year.

Dividend forecast raised to ¥272

JT lifted its FY2026 dividend guidance to ¥136 at the interim stage and ¥136 at the year-end, for an annual ¥272 — up from the ¥234 paid for FY2025 (¥104 interim plus a ¥130 final). The figure is derived from a payout ratio of 75.2% applied to net profit of ¥642.0 billion after adjusting for the Canadian settlement payments. The company had 2,000,000,000 shares issued and 224,560,241 held in treasury at period-end, on a weighted average of 1,775,345,282 shares.

Full-year guidance lifted across the board

Management raised every headline line of its FY2026 outlook. It now guides revenue of ¥3,885,000 million (+12.0%), adjusted operating profit of ¥1,035,000 million (+16.9%), operating profit of ¥1,008,000 million (+16.3%) and profit attributable to owners of ¥644,000 million (+26.2%), for EPS of ¥362.74; constant-currency adjusted operating profit is seen at ¥988,000 million (+11.6%). Against the previous guidance that is ¥188.0 billion (+5.1%) more revenue, ¥80.0 billion (+8.4%) more adjusted operating profit, ¥87.0 billion (+9.4%) more operating profit and ¥74.0 billion more net profit. Measured against FY2025 continuing operations of ¥499,081 million, the net-profit target implies growth of 29.0%. Under chief executive Takehiko Tsutsui, JT targets mid-to-high-single-digit average annual growth in constant-currency adjusted operating profit over the medium term, with the Business Plan 2026 period covering FY2026 to FY2028 assuming a high-single-digit average.

JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.