BTI British American Tobacco PLC

LONDON--British American Tobacco PLC predicted a year of good earnings growth after first-half profit climbed despite currency volatility as the tobacco giant was helped by strong results from associates and joint ventures.

Shares climbed 1.6% to £ 48.24 in early trading in London on Thursday.

The owner of Dunhill, Lucky Strike and Pall Mall brand cigarettes said net profit during the six months ended June 30 rose 1% to £ 2.67 billion ($3.51 billion). Adjusted operating profit dropped 2.2% but the company benefited from an 81% rise in its share of post-tax results from associates and joint ventures.

The cigarette maker indicated that it is on track for a strong year. "With profit growth weighted to the second half of the year, we remain confident that we will deliver another year of good earnings growth at constant rates of exchange," said Chairman Richard Burrows.

BAT maintains a 42% stake in Reynolds American Inc. and the American company accounts for a chunk of its net profit. Reynolds this week said sales climbed 33% in its latest quarter as the tobacco company continued to benefit from last year's acquisition of Lorillard Inc.

BAT's results were also helped by a £ 890 million gain tied to the sale by Reynolds of the non-U.S. rights to its Natural American Spirits cigarette brand to Japan Tobacco Inc. as well as by BAT's acquisition in October of the 24.7% of Souza Cruz SA—Brazil's largest cigarette maker— it didn't already own.

Revenue at BAT rose 4.2% to £ 6.67 billion, helped by higher volumes and pricing. Berenberg analyst Jonathan Leinster described the sales growth as "very strong compared to that of international peers."

Group cigarette volume was 332 billion, an increase of 3.4% on the same period last year, or 2.1% on an organic basis.

Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com and Razak Musah Baba at Razak.Baba@wsj.com

(END) Dow Jones Newswires

July 28, 2016 04:55 ET (08:55 GMT)

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