Category: Financial

Sales up at Swedish Match

Photo: Swedish Match
Sales of Swedish Match increased by 21 percent to SEK5.78 billion ($525.77 million) for the third quarter of 2022. In local currencies, group sales increased by 5 percent. The group’s operating profit increased to SEK2.4 billion from SEK2.08 billion in the comparable 2021 quarter.
Operating profit from product segments increased by 15 percent to SEK2.4 billion. In local currencies, operating profit from product segments declined by 1 percent for the third quarter.
In local currencies, operating profit grew by 12 percent for the smoke-free product segment. For the cigars product segment, operating profit declined, impacted by lower volumes. The lights product segment faced particularly tough conditions and reported a steep decline in operating profit.
Lars Dahlgren
Profit after tax increased to SEK1.78 billion from SEK1.54 billion in the comparable 2021 quarter.
Swedish Match attributed its performance to continued momentum for the U.S. smoke-free business and the strong U.S. dollar.
“Our core smoke-free business, and especially our nicotine pouch businesses, continued to demonstrate strength and attractive prospects, both commercially and from a tobacco harm reduction perspective,” said Swedish Match CEO Lars Dahlgren in a statement. “While we experienced some challenges in the quarter, underlying developments in several of our businesses were stronger than what the reported financials portrayed.”
October 31, 2022
Robust Pricing Boosts JT Results

Masamichi Terabatake (Photo: JT Group)
The JT Group reported revenue of ¥2 trillion ($13.5 billion) for the first nine months of 2022, up 13.7 percent over the comparable 2021 period.
Core revenue at constant currency exchange rates increased by 4.1 percent to ¥1.77 trillion. Adjusted operating profit at constant currency increased by 6.5 percent to ¥78.4 billion. On a reported basis, adjusted operating profit increased by 17.5 percent to ¥637.8 billion. Operating profit increased by 20.5 percent to ¥579.3 billion while profit increased by 19.2 percent to ¥403.8 billion.
“In the nine-month results, the JT Group delivered a strong performance, mainly driven by robust pricing in the tobacco business,” said JT Group President and CEO Masamichi Terabatake in a statement. “We are also encouraged by the Ploom X volume and share performance in Japan. We have launched Ploom X in the U.K. starting in London. We will accelerate Ploom X launches internationally from 2023.”
Terabatake said he had high expectations of the recently announced joint venture with Altria Group to market and commercialize heated-tobacco sticks products in the U.S. “I strongly believe that this cooperation will increase the global harm reduction possibilities for adult consumers and drive incremental value for JT and Altria,” he said.
“We have revised our 2022 full-year guidance upward, driven by business momentum as well as favorable currency movements against the Japanese yen,” said Terabatake. “Following the upward revisions of our guidance, we are pleased to share our plan to increase our annual dividend guidance by ¥38 to ¥188.”
October 31, 2022
Altria Reports Quarterly Results

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Altria Group reported its 2022 third-quarter and nine-months business results and narrowed its guidance for 2022 full-year adjusted diluted earnings per share (EPS).
“This is an exciting moment on our journey toward ‘Moving Beyond Smoking,’” said Billy Gifford, Altria’s CEO, in a statement. “Our tobacco businesses remained resilient during the first nine months of the year, and we continued to reward shareholders while making investments in pursuit of our vision.
“We are optimistic that the actions we have taken to date have strengthened our portfolio in the three major smoke-free categories. We have built a compelling portfolio in heated-tobacco, enhanced our ability to compete in e-vapor and continued to strengthen On!’s position in the oral tobacco category.
“We are narrowing our full-year 2022 guidance and now expect to deliver adjusted diluted EPS in a range of $4.81 to $4.89, representing a growth rate of 4.5 percent to 6 percent from a base of $4.61 in 2021. We believe this range allows us the flexibility to react to marketplace conditions.”
Net revenues for the third quarter decreased 3.5 percent to $6.6 billion, primarily driven by the sale of the company’s former Ste. Michelle wine business in October 2021 and lower net revenues in the smokeable products segment, partially offset by higher net revenues in the oral tobacco products segment. Revenues net of excise taxes decreased 2.2 percent to $5.4 billion.
Reported diluted EPS increased 100 percent-plus to $0.12, primarily driven by lower reported losses from investment in ABI (due primarily to a lower impairment of the company’s investment in ABI), favorable Cronos-related special items, higher reported operating companies income (OCI) and fewer shares outstanding, partially offset by unfavorable changes in the estimated fair value of the company’s investment in Juul (including the corresponding adjustment for a tax valuation allowance).
Adjusted diluted EPS increased 4.9 percent to $1.28, primarily driven by higher adjusted OCI and fewer shares outstanding.
Net revenues for the first nine months decreased 3.9 percent to $19 billion, primarily driven by the sale of the company’s former Ste. Michelle wine business in October 2021 and lower net revenues in the smokeable products segment. Revenues net of excise taxes decreased 2.6 percent to $15.6 billion.
October 31, 2022
Activist Investor Urges Overhaul at KT&G

Photo: KT&G
A Singapore-based activist investment firm is calling on KT&G to spin off its ginseng business and focus on smoking alternatives, reports The Wall Street Journal.
Singapore-based Flashlight Capital Partners has acquired a stake of about 1 percent in the South Korean tobacco conglomerate and is pushing for heat-not-burn products to account for at least half of KT&G’s total tobacco revenue by 2027.
The investment firm also wants KT&G to separate its ginseng business from its core tobacco business to unlock the former’s value and expand it globally. “From our perspective, it defies logic that a ginseng business is owned by a tobacco company,” Flashlight Capital wrote in a letter to KT&G shareholders.
The investment firm is pushing for KT&G to divest noncore businesses, such as its real estate development arm, the letter said. It wants the company to triple the size of its share buyback program and improve on environmental, social and corporate governance matters.
Despite recent gains, the company’s share price is close to where it was 15 years ago, according to Flashlight Capital, which also notes that KT&G trades at a discount to its peers and the broader market.
Previously known as Korea Tobacco and Ginseng, KT&G is one of South Korea’s largest tobacco sellers, with a market capitalization equivalent to about $8.5 billion, according to FactSet.
The company was established in 1883 as a state-run tobacco manufacturer and privatized in 2002. KT&G is now an international company with the equivalent of $3.6 billion in sales.
A KT&G spokesman said the company has been closely communicating with shareholders and that it values their relevant comments. “We will continue to work on maximizing shareholder value by implementing shareholder return policies,” the spokesman added.
October 28, 2022
Turning Point Reports Quarterly Results

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Turning Point Brands (TPB) reported net sales of $107.8 million for the third quarter ended Sept. 30, 2022, down 1.9 percent.
Net sales for Zig-Zag and Stoker’s products increased 23.3 percent and 10 percent, respectively, while net sales for new-generation products declined by 40.3 percent. Gross profit decreased 2.9 percent to $52.7 million and net income decreased 14.3 percent to $11.5 million.
“Zig-Zag and Stoker’s segments demonstrated strong double-digit growth during the quarter despite a challenging economic backdrop with inflationary pressures continuing to impact consumers,” said TPB President and CEO Graham Purdy in a statement.
“Zig-Zag benefitted from solid growth in the U.S. papers and Canadian businesses during the quarter and the successful launch of CLIPPER lighters.
“Meanwhile, Stoker’s MST experienced continued share gains driven by consumer trade-down to the value category. NewGen sales decreased slightly compared to the previous quarter, and the segment remained profitable as we monitor ongoing regulatory developments.
“We continued to return capital to our shareholders during the quarter while maintaining a strong cash balance that provides us with the ability to navigate the current financing environment. While our competitive position remains strong and we outperformed our markets during the quarter, it is prudent to adjust our outlook for the year in light of the current economic environment.”
October 27, 2022
‘Juul Discussing Bailout with Investors’

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Juul Labs is discussing a bailout with two long-time investors to help stave off bankruptcy, reports The Wall Street Journal, citing unnamed sources.
Hyatt Hotels heir Nick Pritzker and California investor Riaz Valani are reportedly considering putting up money to cover the vaping company’s operations and near-term legal liabilities. Valani and Pritzker were Juul’s largest shareholders before Altria Group in 2018 bought a 35 percent stake in the company for $12.8 billion, according to The Wall Street Journal sources.
The goal of the bailout would be to help Juul stay in business and pursue a dispute with federal regulators over whether Juul products can remain on the U.S. market. Once the undisputed leader in the domestic vaping market, Juul Labs has struggled in the face of regulatory scrutiny and legal challenges over its marketing practices.
On June 23, 2022, the Food and Drug Administration rejected Juul Labs’ premarket tobacco product application and ordered the company to remove its products from the market. Juul appealed and on July 5, the FDA stayed its marketing denial order (MDO), announcing that it would review the decision after determining “there are scientific issues unique to this application that warrant additional review.”
On Oct. 21, Juul Labs published the details of its MDO appeal.
The uncertainty around the FDA ban has made it difficult for Juul to secure financing for legal settlements. Juul has been searching for an alternative that could avoid a bankruptcy filing. Earlier this month, Juul began discussions with lenders for financing that would carry the company through a potential Chapter 11 filing.
In a statement to The Wall Street Journal, Juul said it continues to explore several strategic options to secure its business and address the impact of the FDA’s stayed order “as we fight to preserve our mission of transitioning adult smokers away from cigarettes while combating underage use.”
October 25, 2022
ITC Reports Strong Quarter

Photo: Wirestock
ITC of India reported continued strong performance across its business segments for the quarter that ended Sept. 30, 2022. The company’s gross revenue and EBITDA were up 27.1 percent year-one-year.
Revenue from the cigarettes segment was up 23.3 percent over the comparable 2021 quarter, benefiting from a stable fiscal environment and authorities’ enforcement actions against the illicit tobacco trade.
“As seen in the past, stability in taxes on cigarettes, backed by deterrent actions by enforcement agencies, continues to enable volume recovery for the legal cigarette industry from illicit trade, thereby engendering domestic demand for Indian tobaccos while also mitigating loss of tax revenue to the exchequer,” ITC wrote in a statement.
“The company continues to engage with policymakers for a framework of equitable, nondiscriminatory, pragmatic, evidence-based regulations and taxation policies that balance the economic imperatives of the country and tobacco control objectives, cognizing for the unique tobacco consumption pattern in India.”
ITC also reported progress in the construction of a modern facility to manufacture and export nicotine and nicotine derivatives, which is carried out by the company’s wholly owned IndiVision subsidiary.
Designed to manufacture high-purity nicotine derivatives conforming to U.S. and EU pharmacopoeia standards, the facility is expected to be commissioned by the end of the current financial year.
October 21, 2022
PMI Reports 2022 Third-Quarter Results

Photo: Vitezslav Vylicil
Philip Morris International announced its 2022 third-quarter and September year-to-date results.
PMI reported a net revenue decline of 1.1 percent for the third quarter and an increase of 1.3 percent for the nine months year-to-date.
Net revenues from smoke-free products accounted for 30.1 percent of total net revenues, or 29.2 percent on a pro forma basis, for the third quarter. Market share for heated-tobacco units (HTUs) in IQOS markets were up by 1.3 points to 7.7 percent on a pro forma basis. Pro forma total IQOS users at quarter end were estimated at approximately 19.5 million (up by 3.6 million, or 22 percent, versus Sept. 30, 2021), of which approximately 13.5 million had switched to IQOS and stopped smoking. The company increased regular quarterly dividend by 1.6 percent to $1.27 per share, or an annualized rate of $5.08 per share.
For the nine months year-to-date, net revenues from smoke-free products accounted for 30.4 percent of total net revenues, or 29.6 percent on a pro forma basis. Market share for HTUs in IQOS markets was up by 1.2 points to 7.6 percent on a pro forma basis.
“We delivered very strong performance in the third quarter, driving quarterly adjusted diluted EPS of $1.53 per share despite pressures related to currency, the supply chain and inflation,” said PMI CEO Jacek Olczak in a statement.
“IQOS’ excellent momentum continued in the quarter, with heated-tobacco unit volume and share growth across all key geographies driven in part by ILUMA’s strong performance in initial launch markets. This was complemented by the robust performance of our combustible tobacco portfolio, reflecting essentially stable shipment volume, encouraging international market share growth and accelerated pricing.
“As a result of our strong year-to-date performance, we are raising the low end of our full-year pro forma growth outlook for adjusted net revenues, resulting in a range of 6.5 percent to 8 percent on an organic basis, and continue to expect full-year pro forma adjusted diluted EPS growth of 10 percent to 12 percent, excluding currency.”
October 20, 2022
Imperial Announces Share Buyback

Stefan Bomhard (Photo: Imperial Brands)
Imperial Brands has announced the start of a multi-year share buyback program.
The company intends to repurchase up to £1 billion ($1.12 billion) of shares between Oct. 7, 2022, and the end of September 2023. This would represent approximately 5.5 percent of the issued share capital of Imperial Brands based on the Oct. 5, 2022, market close.
“The launch of our new buyback program is an important milestone in our five-year strategy announced in January 2021,” said Imperial Brands CEO Stefan Bomhard in a trading update. “Over the past two years, increased investment and a more consumer-centric approach have improved delivery in both our priority combustible markets and next-generation product operations. Disciplined capital allocation has strengthened our balance sheet to reach our target leverage levels.
“Today’s announcement is underpinned by this improving performance and our confidence in being able to continue generating strong cash flows to support growing shareholder returns in the years to come,” Bomhard added. “We are committed to a progressive dividend and an ongoing buyback program to meaningfully reduce the capital base over time.”
According to Imperial Brands, trading in the year has been in line with expectations. Targeted investment in the company’s five largest combustible markets (which account for around 70 percent of operating profit) has driven an improvement in aggregate market share.
A stronger price mix accelerated the growth rate of tobacco net revenue at constant currency exchange rates in the second half of fiscal 2022. The recovery of international travel has led to a return to pre-Covid purchasing patterns, with increased volume declines, particularly in Northern Europe, partly offset by volume growth in Southern Europe and duty-free.
Imperial Brands reported good progress in implementing its refreshed next-generation product strategy. The company’s Pulze and iD tobacco-heating products debuted in Italy, Europe’s largest heated-tobacco market, while gaining market share in Greece and the Czech Republic. The company says its new Blu 2.0 pod-based vapor device was well received during a consumer trial in France.
Imperial Brands will report its annual results for the year ended Sept. 30, 2022, on Nov. 15, 2022.
October 6, 2022
Speculation Mounting About Juul Bankruptcy

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Juul Labs may be preparing to file for Chapter 11 bankruptcy, according to reports by Bloomberg and The Wall Street Journal and a tweet by Reorg reporter Harvard Zhang.
The vaping company has reportedly received inquiries from lenders and will soon formally request debtor-in-possession financing options.
“We will continue the preparation process for both a restructuring and other strategic options as we determine what path is best for our company,” a Juul spokesman said on Oct. 4.
Chapter 11 allows a company to continue operating while it works with a court and its creditors to reorganize its finances. It doesn’t necessarily herald the end of the company.
A pioneer in the vaping business, Juul Labs has gone from dominating the U.S. e-cigarette market to fighting for its survival in a relatively short time.
Following its initial success, the company quickly came under regulatory scrutiny over its marketing practices. Critics blame Juul Labs for contributing to an “epidemic” of underage vaping.
Thousands of lawsuits have been filed against Juul over the past several years, alleging that the company marketed its e-cigarettes to children. Juul has said it never marketed to underage users.
In June, the U.S. Food and Drug Administration ordered Juul’s products off the market, then stayed the decision pending Juul’s appeal.
Last month, Juul agreed to pay at least $438.5 million in a settlement with more than 30 states.
The uncertainty over Juul’s ability to remain on the market could make it difficult for the vaping company to raise money or secure traditional loans to pay for legal settlements or court judgments.
In September, Juul’s largest shareholder, Altria Group, terminated its noncompete agreement with Juul. Altria’s decision gives Juul more options to secure its business, including the freedom to sell itself—or a significant stake—to one of Altria’s competitors.
The rumors about a possible Juul bankruptcy are not new. Clive Bates, director of The Counterfactual, described them as a “nothing burger with a side of thin air.”
“It has been obvious since @FDA maliciously denied Juul’s marketing application that Chapter 11 is a possibility,” Bates wrote in a tweet. “The ‘scoop’ is that this has not changed.”
October 6, 2022