Author: Staff Writer

British American Tobacco’s cigarette volume during the year to the end of December, at 694 billion, was down by 1.6 per cent on that 2011, 705 billion.

The drop in volume was attributed to industry contractions in Western Europe, Brazil and Egypt, and losses in respect of low value brands in Indonesia and Turkey.

The company’s organic volume was down by 2.0 per cent to 691 billion; or by 1.7 per cent excluding the effect of the Japanese market where foreign manufacturers made volume and shares gains in 2011 following the disruption caused to Japan Tobacco Inc’s manufacturing and distribution operations by the earthquake and tsunami that struck on March 11, 2011.

In BAT’s EEMEA (Eastern Europe, Middle East and Africa) region, volume was down by 0.4 per cent to 235 billion; in its Asia Pacific region, volume was down by 1.6 per cent to 188 billion; in its Americas region, volume was down by 0.7 per cent to 142 billion; and in its Western Europe region, volume was down by 4.4 per cent to 129 billion.

The volume accounted for by the company’s global drive brands grew by three per cent, with Lucky Strike up 11 per cent, Pall Mall up three per cent, Dunhill up two per cent and Kent up one per cent (or four per cent taking out the Japan-market effect).

Global drive brands now account for more than a third of BAT’s volume.

BAT’s reporting of other tobacco products was limited to fine-cut volume in Western Europe, which grew by eight per cent to 14,494 tonnes.

The company’s reported revenue was down by one per cent due to adverse currency movements, while revenue at constant rates of exchange was up by four per cent to £15,999 million.

Reported profits from operations increased by 15 per cent while adjusted profit from operations at constant rates of exchange increased by eight per cent to £5,970 million.

Basic earnings per share were up by 26 per cent to 198.1p, while adjusted diluted earnings per share were up by seven per cent to 207.5p.

BAT’s chief executive, Nicandro Durante, said that BAT had exceeded all of its financial objectives in 2012. (Click here to view a video interview about the 2012 results with Durante.)

“We delivered organic revenue growth on a constant currency basis of four per cent and adjusted profit from operations of eight per cent at constant rates of exchange,” he said. “Despite the adverse exchange rates, once again we delivered excellent returns to shareholders, with adjusted diluted earnings per share up by seven per cent on last year, with an increase of 12% at constant exchange rates.

“We grew our underlying market share in 2012, with good share momentum in the second half of the year. Pricing remains strong and, while our cigarette volumes were down slightly, this was mainly due to industry declines in some of our major markets.”

Turning to next-generation products, Durante said that BAT was developing a portfolio of products.

Nicoventures, a company BAT set up in 2011, was aiming to launch nicotine-based products, and in December BAT had acquired CN Creative, a UK-based company specialising in the development of e-cigarette technologies.

Molins’ sales during the year to the end of December, at £93.0 million, were up by three per cent on those of 2011, £89.9 million.

Its underlying profit before tax was up by nine per cent to £4.9 million and its underlying earnings per share was increased by 19 per cent to 21.8p.

Tobacco Machinery sales were down by nine per cent to £31.1m, but operating profit before exceptional items was maintained at £2.2 million.

Sales within the group’s Scientific Services division, which comprises Arista Laboratories and Cerulean, increased by nine per cent £23.1 million, but operating profit, before exceptional items, decreased by 37 per cent to £1.2 million, mainly as a result of increased infrastructure costs and a ‘particularly uneven work-load at Arista’.

Packaging Machinery sales increased by 12 per cent to £38.8 million, while operating profit, before exceptional items, rose from £0.4 million in 2011 to £1.5 million in 2012.

The chief executive, Dick Hunter, said that the group had continued to show good progress during the year, delivering both increased sales and underlying earnings.

“We have also continued to invest across the group, with a particular emphasis on opportunities within the Scientific Services division,” he said.

“Looking ahead, we have entered 2013 with a good order book and are well placed to make further progress with our various growth initiatives during the year.”

The Altria Group has lost a bid to block a 2009 New York City law banning the sale of flavored smokeless tobacco products except in tobacco bars, according to a CSP (Convenience Store/Petroleum) story quoting a Bloomberg report.

The US appeals court in New York on Tuesday upheld a lower-court ruling that rejected arguments by two Altria units, US Smokeless Tobacco Manufacturing and US Smokeless Tobacco Brands, that the city’s measure was pre-empted by federal law.

Brian May, a spokesperson for Altria, was quoted as saying that the company was disappointed with the court’s decision and was considering its options.

Tobacconists and petrol station owners in the Netherlands are calling on parliament to make it a criminal offence for the under-16s to be in possession of tobacco products, according to an Expatica.com story quoting the Telegraaf.

Shopkeepers caught selling cigarettes to youngsters face a fine of €450 but the youngsters get off scot-free, the retailers argue.

‘The youngsters get away with it,” Edsko Schuitema, of petrol station owner lobby group Beta was quoted as saying. “But why should the responsibility not be shared?”

Meanwhile, Gert Koudijs, of the tobacconist shop owners’ association, NSO, said that the only way to stop 14-year-olds from buying cigarettes was to fine them for possession.

Dutch MPs are considering plans to increase the age at which teenagers can buy cigarettes from 16 to 18, following industry calls for an increase.

On January 1, it became a criminal offence punishable by fines for under-16-year-olds to be in possession of alcohol.

The Altria Group said yesterday that its board of directors had declared a regular quarterly dividend of $0.44 per common share, payable on April 10 to shareholders of record as of March 15.

The ex-dividend date is March 13.

Pro-smoking forces have won a rare victory in Australia.

After a two-year battle, smokers will again be allowed to light their cigarettes when dining outdoors in Parramatta, a suburb of Sydney, Australia, after the local council deferred to the wishes of restaurateurs concerned about lost profits, according to a story in the Sydney Morning Herald.

”We are so relieved – this is great news,” Omar Besiso, of the Parramatta Business Freedom Association, a group representing 50 businesses, was quoted as saying. ”It was never fair that customers could just leave and go to restaurants in Granville or Merrylands, where they could smoke.

”You can’t stop someone from smoking. We just didn’t want to be disadvantaged because our council won’t allow it.”

But as usual, this is likely to be a short-lived victory – at least as far as smokers are concerned

”The state government will bring in the same ban in 2015 that all restaurants have to comply with,” said Anita Tang, the manager of policy and advocacy at Cancer Council NSW. ”The council’s move is out of step with what the state government wants.”

NewCo has said that for each container it ships to its clients during 2013, it will donate $50 to one of three foundations chosen by the client.

The company said in a press note yesterday that it had decided to donate money to those who needed help ‘in their lives and in their development’.

Together with its global business partners and colleagues, the company had identified three sectors in which it would like to provide aid: education, health and the environment.

And specifically for 2013 NewCo has chosen the following projects:

* In the Guntur region of India it is supporting schools, especially those for the blind and the mentally and physically handicapped.

* In the Kushtia region of Bangladesh it is supporting education, acute medical care, and the treatment and rehabilitation of sick, injured, disabled and destitute women and children.

* In the Namadzi region of Malawi it is supporting a Wellness Clinic focused on HIV education, counseling and health, as well as on family planning. A crèche will allow mothers to go to work and leave their children in a safe environment.

More information about these projects is under the social responsibility section of NewCo’s website at www.newco-online.com.

Japan Tobacco Inc said today that it had repurchased 86,805,500 of its common-stock shares for ¥249,999,840,000.

This followed a resolution by JT’s board of directors on Monday providing for the repurchase up to 118,000,000 of its common stock (6.20 per cent of the total issued shares, excluding treasury shares), or shares worth up to ¥250,000,000,000, through the Tokyo Stock Exchange’s off-auction, own-share repurchase system between February 27 and March 8.

As a result of today’s repurchase of shares by JT, the government, which had previously announced that it was to offer for sale 333,333,200 of JT’s common stock, is now expected to offer 253,261,800 shares.

And once the government has sold its shares, the Minister of Finance, currently JT’s controlling shareholder other than the parent company, with 52.2 per cent of voting rights, is expected no longer to meet that definition, though it will remain the largest shareholder, with 36.7 per cent of voting rights.

The Altria Group said yesterday that its board of directors had elected Debra J. Kelly-Ennis to the board.

With the addition of Kelly-Ennis, Altria’s board increases from 11 to 12 directors.

Kelly-Ennis was president and chief executive officer of Diageo Canada, a subsidiary of Diageo plc, a global spirits, wine and beer company, from 2008 to June 2012.

From 2005 to 2008, she was chief marketing officer for Diageo North America, another subsidiary of Diageo plc.

Kelly-Ennis has held marketing, sales and general management positions also with RJR/Nabisco, The Coca-Cola Co, General Motors Corp and Grand Metropolitan PLC.

She is a member of the board of directors of Carnival Corp, Carnival plc and PulteGroup. She serves also on the board of directors of Dress for Success Worldwide.