PMI Reports Higher Quarterly Revenues

Photo: PMI

Philip Morris International reported net revenues of $7.59 billion in the quarter that ended on June 30, 2021, up 14.2 percent from the net revenues reported in the comparable 2020 quarter. Adjusted net revenues were $7.84 billion compared with $6.65 billion in the 2020 second quarter. Second-quarter 2021 operating income stood at $3.13 billion versus $2.73 billion for the previous year’s second quarter. Adjusted quarterly operating income was $3.45 billion, up from $2.8 billion a year ago.

The company shipped 180.49 billion cigarettes and heated-tobacco units during the 2021 second quarter, 6.1 percent more than during the 2020 second quarter. Sales of heated-tobacco units increased 30.2 percent from the 2020 quarter to 24.36 billion units. Combustible cigarette sales increased by 3.2 percent to 156.14 billion sticks over the same period.

“We delivered strong financial performance in the quarter, with adjusted diluted EPS of $1.57 up by 17.8 percent on an organic basis,” said Jacek Olczak, CEO of PMI, in a statement.

“IQOS continued its impressive growth, surpassing an estimated 20 million total users by quarter-end and driving sequential quarterly heated-tobacco unit in-market sales volume growth of 8 percent. We expect this momentum to be bolstered by the launch of IQOS ILUMA starting next month in Japan.”

“We are increasing our full-year adjusted outlook, with organic net revenue growth of 6 percent to 7 percent and adjusted diluted EPS growth of 12 percent to 14 percent on the same basis, mainly reflecting improved total industry volume. This outlook further supports our recently announced three-year share repurchase program of up to $7 billion.”

“In addition, the proposed acquisitions of Fertin Pharma and Vectura Group will reinforce our long-term growth potential in the beyond nicotine space.”

PMI’s adjusted net revenues exclude the impact related to a Saudi Arabia customs assessments. In June 2021, the Customs Appeal Committee in Riyadh notified the company’s distributors in Saudi Arabia of its decisions to largely reject their challenges of Saudi Arabia Customs General Authority assessments.

Based on these decisions, PMI recorded a pre-tax charge of $246 million in the second quarter of 2021, resulting in a $0.14 per share adverse impact on the company’s reported diluted earnings per share. In accordance with U.S. generally accepted accounting principles, the charge was recorded as a reduction of net revenues on the consolidated statement of earnings.