(Adds detail, shares, background)
Oct 27 (Reuters) - Tobacco group Swedish Match reported on Friday a higher-than-expected third-quarter profit as higher prices in Sweden on its wet snuff Snus compensated for a slower growth in cigar volume in the United States.
* EBIT from product areas, which excludes one-offs and share of profit in spun-off Scandinavian Tobacco Group, unchanged yr/yr at 1.09 bln SEK vs Reuters poll forecast 1.06 bln
* Shares up 3.5 pct at 0736 GMT taking a YTD increase to 6.5 pct
* EBIT margin at the snus and snuff unit widened to 45.2 pct from 43.1 pct, vs. a forecast 43.6 pct as profit and sales in Scandinavia grew, helped by better price/mix and volume growth
* “We effectively managed our price changes in Sweden without losing our volume momentum, and in the U.S. we continued to reduce the losses from snus and nicotine pouches on impressive growth and better pricing,” CEO Lars Dahlgren said.
* Swedish Match has been expanding rapidly in the United States with machine-made cigars, and is also hoping for a break-through there with its Swedish-style wet snuff “snus”, as a spike in snus competition in core market Sweden challenges its dominant position and has eroded margins
* Swedish Match said Q3 volume growth for cigars was modest
* It had in July expressed caution about prospects to increase volumes further this year despite reaching record levels in Q2
* Swedish Match said on Friday it still aims to grow cigar volumes in the U.S. in 2017, however adding again the caution that the year-ago comparison for H2 is difficult
* Sees more modest snus consumption growth in 2016 vs. 2017 with continued tough competition
* Says expects U.S. cigar market to remain highly competitive 2017 (Reporting by Helena Soderpalm, additional reporting by Anna Ringstrom, editing by Terje Solsvik)