271010 the effect of ‘reduced ignition propensity’ legislation on British American Tobacco’s South African operations. PHOTO SUPPLIED 7

London - British American Tobacco, the maker of Lucky Strike and Pall Mall cigarettes, reported a 6-percent decline in first-half earnings as the strength of the pound hampered international growth.

Adjusted profit from operations declined to 2.51 billion pounds ($3.9 billion), the London-based company said in a statement on Wednesday. That compares with the 2.44 billion-pound average estimate in a Bloomberg survey. Excluding currency fluctuations, profit rose 1.3 percent.

Reynolds American’s deal to buy Lorillard has given BAT a bigger US presence after it paid $4.7 billion to retain its stake in the enlarged Reynolds. Reynolds shares made their biggest gain since 2008 yesterday after the company boosted its full-year earnings forecast. BAT is also looking to squeeze more profit out of Brazil, its biggest market, by acquiring the stake it doesn’t already own in Souza Cruz SA.

“The underlying performance of the business remains strong and we are confident that we are on course to deliver an improved second half, leading to another year of good earnings growth at constant rates of exchange,” Chairman Richard Burrows said in the statement.

BAT will pay an interim dividend of 49.4 pence a share, up 4 percent on the prior year and matching Bloomberg’s forecast.