Britain's Imperial Tobacco, the maker of Lambert and Butler and Gauloises cigarettes, has posted tumbling half-year profits, hit partly by tighter regulation and rising taxation in Russia.
Profit after tax slumped 39 per cent to STG377 million ($A688 million) in the six months to the end of March, compared with the equivalent previous figure, Imperial said in a results statement.
Revenues fell five per cent to STG12.717 billion in the reporting period, while total volumes slid eight per cent to 140 billion cigarettes.
"Market weakness continued in Russia following regulatory and excise (tax) changes," the company added in the statement.
Russia has banned tobacco advertising and banned people from smoking in most public places while gradually raising taxes more closely in line with European prices, in order to crack down on smoking and boost sagging federal budget revenues.
Imperial added that it was also hit by a stock optimisation program, under which the group is slashing inventories.
The policy seeks to improve the group's performance and cut costs in the long term, but weighs on profits and revenues in the short term.
"We continue to drive our strategy to build the quality and sustainability of the business," said chief executive Alison Cooper.
"Our stock optimisation program has inevitably impacted some of our numbers but I'm pleased with our underlying performance."
Wednesday's results were published one month after the company announced the closure of factories in Britain and France with the loss of 900 jobs, citing declining sales in Europe, tougher anti-smoking measures and the growth of contraband sales.
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