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Category: Business & Finance

  • PMI Suspends Operations in Ukraine

    PMI Suspends Operations in Ukraine

    Philip Morris International is suspending operations in Ukraine, including its factory in Kharkiv, following the invasion of Russian forces into the country, according to The Wall Street Journal.

    “The safety and security of our colleagues and their families is our primary concern, and we have, therefore, temporarily suspended our operations in Ukraine,” said PMI CEO Jacek Olczak. “Our employees are advised to stay at home or in any safe place and follow instructions from local authorities.”

    PMI has more than 1,300 employees in Ukraine. The country accounted for about 2 percent of PMI’s total cigarette and heated-tobacco shipment volume in 2021.

    PMI has stated that it has contingency plans in place to restart operations once conditions are safe.

  • Turning Point Brands Reflects on Strong 2021

    Turning Point Brands Reflects on Strong 2021

    Yavor Efremov (Photo: TPB)

    Turning Point Brands (TPB) announced financial results for the fourth quarter and full year ended Dec. 31, 2021.

    Net sales were comparable with the fourth quarter of 2020 at $105.3 million despite a 22 percent decline in sales of new-generation (“NewGen”) products.

    Gross profit decreased 3.8 percent to $50.3 million compared to the fourth quarter of 2020. Net income decreased 20.3 percent to $11.5 million. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) decreased 7.6 percent to $23.8 million.

    Full-year 2021 net sales increased 10 percent to $445.5 million. Gross profit increased 14.7 percent to $217.8 million. Net income increased 36.3 percent to $52.1 million. Adjusted EBITDA increased 19.8 percent to $108.1 million.

    “Our fourth-quarter results capped off another strong year of performance for Turning Point Brands, with EBITDA growing 20 percent for the fiscal year. Sales for the fourth quarter finished above our previous guidance and in line with the previous year despite a 22 percent decline in NewGen sales, which fell within our previous guidance,” said TPB President and CEO Yavor Efremov, in a statement.

    “Zig-Zag delivered another quarter of double-digit growth against a tough comparable period while Stoker’s reaccelerated to high single-digit growth driven by mid-teens growth in the moist snuff tobacco business. Additionally, NewGen managed through a challenging quarter clouded by the evolving regulatory landscape while maintaining long-term upside potential in a post-PMTA [premarket tobacco product application] environment.

    “Turning to capital deployment, we increased our share repurchase activity during the quarter and continue to maintain a strong balance sheet. Going forward, I am eager about the opportunity to work with a great organization, continue our momentum and invest further to deliver future organic and inorganic growth.”

    In related news, TPB entered into an agreement with Flamagas, a lighter manufacturer, for exclusive distribution of Clipper lighters in the United States and Canada.

    “Given Flamagas’ global reach and renowned product portfolio, this partnership represents a tremendous opportunity to expand Clipper’s reach in the United States and Canada,” said TPB Senior Vice President ff Sales And Marketing Frank Vignone in a statement.

  • USTC Plans Bankruptcy Exit

    USTC Plans Bankruptcy Exit

    Photo: USTC

    U.S. Tobacco Cooperative (USTC) has begun planning an exit from Chapter 11 bankruptcy later this summer. The cooperative originally filed for protection in July 2021 to meet contractual obligations to its member growers while the company faced uncertainty presented by an ongoing class-action lawsuit.

    Oscar House

    “On February 2, after 17 years of litigation, we were able to reach economic terms of a settlement with the Lewis Class,” said USTC CEO Oscar J. House. “As we await final approval from the court this summer, we are beginning to prepare our exit from bankruptcy and continue providing the exceptional service and quality products our organization is known for across the globe.”

    USTC originally filed for protection in federal bankruptcy court to satisfy obligations to its 550-plus member-growers, 200-plus employees, suppliers and customers. The settlement and plan of reorganization will allow the cooperative to honor its commitments worldwide and emerge from bankruptcy well positioned to serve its member-growers. Details of the agreement will be provided in the ordinary course of obtaining formal court approval of the settlement and USTC’s plan of reorganization.

    “USTC is healthy and set for a sustainable, successful future,” continued House. “Throughout the bankruptcy process we have fulfilled all obligations to all stakeholders: our customers, grower-members, vendors and employees. Going forward we will continue to do so, stronger than ever.”

  • Poda and Landewyck Explore Partnership

    Poda and Landewyck Explore Partnership

    Photo: DragonImages

    Poda Holdings and Landewyck Tobacco are exploring the potential of a partnership.

    The companies intend to enter into a cooperation agreement based on both parties’ intellectual property, branding, manufacturing facilities and distribution channels to develop one or more products for commercialization.

    Before further developing the cooperation project, the parties intend to assess the relevance of their cooperation by implementing a trial period for blend development, which could be used for the potential cooperation products.

    By bringing together Landewyck’s tobacco manufacturing and distribution expertise and Poda’s patented heat-not-burn technology, the aim is to develop a consumer-centric product offering both convenience and optimal flavor in the reduced-risk sphere.

    “We’re very excited to further strengthen our collaboration with Ryan and the Poda team,” said Georges Krombach, general manager of export and new-generation products for Landewyck, in a statement. “The technology and intellectual property behind Poda are disruptive and deliver a strong customer experience. By adding our tobacco and our European regulatory and distribution expertise, we expect to have great success in the European marketplace.

    “We manufacture tobacco and cigarettes at our own facilities exclusively in Western Europe and attach great importance to maintaining the highest manufacturing, working and product standards that are socially acceptable to our consumers, partners and importers worldwide. Our master tobacco blenders travel to the farthest reaches of the globe to hand select the best leaves, hence ensuring the unique flavor of our tobacco products—and all so our customers can enjoy the ultimate in tobacco pleasure.

    “From product and manufacturing standards to employees and retailers, we always ensure that our business decisions and the products we supply are in keeping with our family spirit and upholding our tradition of delivering 100 percent quality, flavor and customer satisfaction.”

    “This marks another milestone in Poda’s commercialization efforts in Europe and abroad,” said Ryan Selby, Poda’s CEO. “Landewyck has been working in the tobacco space for over 170 years and brings a tremendous amount of manufacturing and distribution experience and expertise. We intend to get moving immediately on the blend development trial and hope to move quickly into large-scale commercialization of the cooperation products.”

  • Armenia Tobacco Firm Exampted from Duties

    Armenia Tobacco Firm Exampted from Duties

    Photo: Tobacco Reporter archive

    The Armenian government will exempt cigarette manufacturer DrimCompany from customs duty payments on raw materials imports to encourage investment, reports the Arka News Agency.

    Founded in 2021, DrimCompany aims to sell its products internationally, with a large share of exports going to the Eurasian Economic Union countries.

    DrimCompany has pledged to invest AMD11.9 billion ($24.67 million), including AMD2 billion in the purchase of a new production line. The rest will be spent on the construction and purchase of raw materials and equipment.

    The company said it will create 100 new jobs with an average salary up to AMD450,000 by 2024.

    The customs duty exemption benefit is estimated at AMD937.7 million.