Imperial Tobacco Group (IMT.L) has revealed that lower prices in Spain could see its operating profits reduced by £70 million.

The tobacco company said the figure represented an 'improvement' on a previous estimated impact of £110 million.

The group revealed net revenue grew by 2 per cent during the nine months to 30 June 2011 in trading update.

Excluding Spain, tobacco net revenue has grown by 4 per cent. The group reduced cigarette prices in May and June to reposition brands.

Alison Cooper, chief executive of Imperial Tobacco Group, said increased volumes in emerging markets had helped performance.

She said, 'We are well placed to build on our sales growth momentum in the remainder of the year, which supported by our ongoing focus on costs and effectively using our cash, will enable us to continue maximising value for our shareholders.'

The group reported 'excellent growth' for luxury Cuban cigars in Russia, Brazil and China.

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