British American Tobacco saw profits in the full year slump by 26 per cent, reflecting one-off items and losses from the sale of some of its businesses.
In the year to December 2003, the group's pre-tax profit fell to £1.567 billion sterling from £2.113 billion last time, way below the forecast range of £2.541-2.59 billion.
Operating profit before goodwill amortisation and exceptional items however rose 4 per cent to £2.781 billion from £2.681 billion.
Group volumes grew by 2 per cent to £792 billion, with sales of its global brands - Kent, Dunhill, Lucky Strike and Pall Mall - achieving 13 per cent growth.
Basic earnings per share fell to 26.93 pence from 50.91 pence, while adjusted diluted EPS rose 4 per cent to 69.21 pence, reflecting the impact of the share buyback programme.
The group is paying a final dividend of 27.0 pence, bringing the total for the year to 38.8 pence, both up 10 per cent and in line with analysts' expectations.
Looking forward, chairman Mr Martin Broughton cautioned that the weak US dollar could "adversely" affect the group's profit growth this year when translated into earnings.
But he is positive about the prospects of the business nonetheless following the string of acquisitions it made in 2003.