Japan Tobacco will apply to be in the new “Prime Market” segment of the Tokyo Stock Exchange, the company announced in a press note.
JT received assessment results of the initial listing criteria for the new market segment of the Tokyo Stock Exchange on July 9, 2021, confirming that the company complies with the listing criteria for the “Prime Market” segment.
BAT is making “excellent progress” toward its £5 billion ($6.62 billion) revenue target by 2025, CEO Jack Bowles said in a trading update. New category products are now a sizable contributor to group revenue growth and will continue to profit growth for the first time as their losses start to reduce, he noted.
“We are building strong, fast-growing, global brands of the future, adding another 3.6 million consumers of noncombustible products in the first nine months of the year—more than in all of 2020,” said Bowles.
“Our strong focus on cash flow and deleveraging continues. We recognize the clear value of a share buyback at the current valuation. We also continue to be clear on the need to deliver on our 2021 commitment to reduce leverage to circa three times adjusted net debt/adjusted EBITDA and expect to reach this by the year end. This will provide greater capital allocation flexibility as we enter 2022.”
According to BAT, the company’s Vuse vapor cigarette is approaching nationwide leadership with a 31.4 percent value share of the U.S. vapor market. Glo Hyper reached a category volume share of 17.7 percent in the top nine tobacco-heating products markets.
Meanwhile, the company continued to enjoy value growth in combustibles, with strong pricing partially offset by geographic mix and the absorption of about £260 million profit impact in Australia and New Zealand.
RLX Technology today announced its unaudited financial results for the third quarter ended Sept. 30, 2021.
Net revenues were CNY1.68 billion ($260.2 million), representing a decrease of 34 percent from CNY2.54 billion in the second quarter of 2021.
Gross margin was 39.1 percent, compared to 45.1 percent in the second quarter of 2021. U.S. GAAP net income was CNY976.4 million, compared with CNY824.3 million in the second quarter of 2021.
Non-GAAP net income was CNY452.7 million, compared with CNY651.8 million in the second quarter of 2021.
“In the third quarter, we continued to develop our business through concerted efforts deepening our scientific research abilities, adding to our differentiated product portfolio, and enhancing our sustainability initiatives. We also strengthened our core capabilities by expanding our talent pool, optimizing our retail network and making digitalization upgrades to our operating infrastructure,” said Ying (“Kate”) Wang, co-founder, chairperson of the board of directors and CEO of RLX Technology, in a statement.
“Looking ahead, with the formal confirmation of the amendment to the implementation rules of tobacco monopoly law announced last week bringing innovative tobacco products including e-cigarettes under the regulatory framework, together with the draft administrative measures for electronic cigarettes and the draft national electronic cigarette product standards announced earlier this week, we believe the sector will enter a new era of development—an era marked by enhanced product safety and quality, augmented social responsibilities, and improved intellectual property protection. These developments will pave way for long-term sustainable growth in this sector.”
“In the past quarter, we placed even more focus on investments in R&D, organizational upgrades and operational efficiency improvements in existing channels, shifting from the efforts on distribution network expansion in previous quarters,” said Chao Lu, chief financial officer of RLX Technology. “As a result, we have a richer product portfolio in the pipeline and healthier inventory levels across our value chain.”
“We believe our quarterly revenue drop was temporary, and the investments we made in products, talents, research, and compliance in the third quarter and beyond will place us in advantageous positions under the new regulatory paradigm. We expect these investments to yield steady and sustainable growth soon,” Lu added.
A class action claim seeking more than $1 billion postponed U.S. Tobacco Cooperative’s (USTC) bankruptcy exit, as the co-op agreed to suspend a hearing on its proposed reorganization plan to mediate lingering disputes with lenders and former grower members, reports Bloomberg Law.
In July, USTC filed for Chapter 11 protection in federal court to meet short-term contractual obligations to its member growers during the 2021 crop season.
“This filing will allow USTC to reorganize and restructure to honor commitments to stakeholders and ensure the organization’s sustainable future,” the company wrote in a press note at the time.
KT&G’s share buybacks have attracted the attention of investors interested in high-dividend stocks, reports The Korea Times.
Earlier this month, the company announced it will buy back 4.1 million of its own shares worth around KRW342.7 billion ($288.18 million) to enhance shareholder value. They will be acquired through an exchange-trade purchase through Feb. 4.
It also unveiled a mid- to long-term shareholder dividends policy—KT&G plans to pay out about KRW2.75 trillion by 2023, through existing cash reserves.
KT&G has paid high dividends to shareholders with an average payout ratio of 50.8 percent for the past 20 years, higher than the average Korea Composite Stock Price Index ratio of 40 percent and the Standard & Poor’s 500 Index ratio of 41 percent. It has paid dividends for 22-consecutive years since its listing in 1999.
KT&G’s third-quarter performance this year slightly exceeded the market consensus. Consolidated sales for the third quarter reached KRW1.57 trillion, up 7.2 percent compared to the same period last year, although operating profit decreased 2.3 percent to KRW423.9 billion.
The increase in sales was driven by the growth of KT&G’s heat-not-burn business and overseas cigarette subsidiaries. Operating profit, however, was impacted by a decrease in cigarette exports and delayed recovery among KT&G’s nontobacco subsidiaries.
The China-based vapor company COEE has recently completed A-round financing of several million yuan, led by QF Capital investment, followed by investments from other financial groups.
“We mainly use A-round of financing to focus on improving our production R&D, layout in the global market channel and user development as benefits of maintaining our product competitiveness and market influence,” said Tongliang Gao, co-president of COEE, in a statement. “We are upholding the core values of long-termism, adopt[ing] innovative ‘manufacturer to sale integration’ channel strategy, consistently respond[ing] and embrac[ing] policy supervision from the government, follow[ing] to the bottom line of protecting minors, and striv[ing] to become a marathon runner in the market.”
Established in January 2021 in Shenzhen, COEE is a user-focused vape company that integrates with vape industry supply chains and strong market channel partners, according to the release. COEE has become the standing director unit of the E-Cigarette Industry Committee and China Electronic Chamber of Commerce.
COEE products include its first-generation “Meet” series that was launched in April. The device now offers 17 pod flavors. COEE stores have covered 30 provinces and 180 cities in the China mainland, and various stores and sales points have reached nearly 5,000. Qiyuan Liu, head of consumption investment for QF Capital, said that COEE’s core operation team previously worked in the mobile phones market.
“COEE has unique experience in channel construction and terminal management,” Qiyuan said. “Capitals recognize COEE team capabilities very much, and we are seeing COEE consistently put efforts in responding and cooperating with the supervision of the government. We are optimistic about the future development prospects of the project driven by demand.”
Imperial Brands reported net revenue of £32.79 billion in the full year that ended Sept. 30, 2021, up 0.7 percent over that reported in 2020. On an organic adjusted basis, net revenue was £7.59 billion, down 1.9 percent but up 1.4 percent at constant currency.
The company operating profit increased 15.2 percent to £3.15 billion. On an organic adjusted basis, operating profit was £3.57 billion, up 2.1 percent (4.8 percent at constant currency) over the previous fiscal year.
“This has been a year of important progress and significant change as we begin to deliver on the new, focused strategy we announced in January 2021,” said Imperial Brands CEO Stefan Bomhard in a statement.
“We have substantially refreshed our leadership team, making new hires to strengthen our consumer-facing capabilities, while building on our existing deep tobacco experience. We have changed the way we work, placing the consumer at the center of our decision-making. We have simplified the organization, creating efficiencies for reinvestment. And we have introduced more rigorous performance management, enabling better prioritization of resources.
Through our focused, consumer-led next-generation products strategy, we are committed to making a meaningful contribution to harm reduction over time.
“This approach is already delivering improved operational and financial outcomes. In tobacco, our sharper focus and increased investment in the top-five priority markets have begun to stabilize the aggregate market share performance. This is encouraging early progress in addressing the long-term historical declines. We will build on this foundation in the coming year with further investment in brand building and sales execution.
“Through our focused, consumer-led next-generation products strategy, we are committed to making a meaningful contribution to harm reduction over time by offering adult smokers potentially reduced-risk products. In line with our plans, we launched market trials for our heated-tobacco proposition, Pulze and iD sticks in the Czech Republic and Greece, as well as a trial of an improved consumer marketing proposition for our U.S. vapor product, Blu. We will track the consumer data over the coming months to inform our next steps.
“Our five-year plan to transform Imperial is divided into two distinct periods. The year ahead will complete the two-year strengthening phase with further investment in our five priority markets and NGP pilots, the embedding of new ways of working and cost-saving initiatives. This period builds the foundations for the subsequent three-year phase, which focuses on the acceleration of returns and sustainable growth in shareholder value.”
In related news, Ngozi Edozien and Diane de Saint Victor joined the Imperial board as nonexecutive directors on Nov. 15, 2021.
Edozien will join the audit committee, and de Saint Victor will join the remuneration
committee, with effect from Nov. 15. There are no other changes to committee memberships.
Edozien is a nonexecutive director of Guinness Nigeria, Stanbic IBTC Holdings and
Barloworld Limited and was a nonexecutive director of PZ Cussons until September 2017.
De Saint Victor is a nonexecutive director of Transocean Limited and Natixis, which delisted in July 2021.
De Saint Victor was a director of ABB India until July 2020 and was a nonexecutive director of Altran Technologies until April 2020 and Barclays until May 2017.
Pyxus International reported sales and other operating revenues of $394.2 million for the second quarter of 2021, up 30.3 percent from the same period in 2020.
Gross profit as a percent of sales increased to 13.2 percent from 11.8 percent. The company reported a net loss of $9.7 million in the second quarter, compared with net income of $105.9 million for comparable 2020 period.
Adjusted EBITDA increased 32.8 percent to $25.9 million for the quarter.
“We continue to be pleased with the growing momentum of our business,” said Pieter Sikkel, president and CEO of Pyxus, in a statement. “Our new operational and capital structures, supported by our sustainability strategy, are proving to be points of differentiation with our customers, and we are seeing increased demand for our leaf products and growth in market share.
“The leaf business continues to be impacted by Covid-related shipping constraints, including vessel and equipment availability, port congestion and rising freight costs. We are taking proactive steps to mitigate these challenges, including taking steps to accelerate shipments, exploring new ports for product export, and working closely with customers to determine if there are ways to expedite the process flow for their operations.
“With regards to e-liquids, while the regulation and enforcement activities in the e-liquids industry are continuing to mature, we await Premarket Tobacco Product Application (PMTA) approval notification for our pending applications for Humble Juice Co. and Twelfth State Brands and, if our PMTAs are approved, we look forward to the post-PMTA market opportunities.
“Despite Covid-related shipping constraints that face many industries, the first half of fiscal 2022 reflects improved demand, increased leaf volumes, and improved operational performance. As we leverage the savings from fiscal 2021 restructuring initiatives, we continue to expect fiscal 2022 sales to be between $1.65 billion and $1.8 billion, SG&A expense to be between $140 million and $145 million (excluding non-recurring items and potential changes in foreign currency exchange rates), and adjusted EBITDA to be between $150 million and $170 million. The strengthening of our business in a sustainable manner remains a priority as our global team works together to achieve our purpose of growing a better world.”
The tobacco business’ performance reflects Vector’s advantages in the deep discount segment, says CEO.
Vector Group reported consolidated revenues of $652.65 million for the third quarter of 2021, up 19 percent over those of the 2020 third quarter. Reported net income increased $10.8 million to $48.9 million. Adjusted net income was $52.6 million, $14.3 million more than in the prior year period.
“Vector had another outstanding quarter, achieving all-time high quarterly revenues and significantly increased operating income,” said Howard M. Lorber, president and CEO of Vector Group, in a statement.
“We are excited by the continued strong performance of our tobacco business, which validates our market strategy and reflects the competitive advantages we have in the deep discount segment. Our Douglas Elliman subsidiary also delivered record revenues up 70 percent during the quarter compared to the year ago period, and closed sales volume was up 62 percent over the same time frame. Combined with expense reductions, Douglas Elliman achieved record quarterly adjusted EBITDA during the third quarter.”
In a press release, Vector Group announced that Douglas Elliman plans to file a Form 10 registration statement with the Securities and Exchange Commission in connection with its intended spin-off into a standalone publicly traded company.
Scandinavian Tobacco Group (STG) reported net sales of DKK2.18 billion ($338.78 million) in the third quarter of 2021 compared with DKK2.231 million in the third quarter of 2020. EBITDA before special items was DKK627 million, up from DKK614 million in the prior-year period. Organic EBITDA growth was positively impacted by a DKK31 million income from certain duty refunds in the U.S.
The results were driven by continued strong demand for handmade cigars in the U.S, a favorable market and product mix, and synergies from the integration of Agio Cigars. Supply issues in Europe impacted net sales negatively in the third quarter.
“We delivered strong quarterly performance in line with expectations and maintain the positive momentum we have had throughout 2020 and 2021,” said STG CEO Niels Frederiksen in a statement.
“The combination of the integration of Agio Cigars, the growth in handmade cigars and our underlying transformation have significantly improved our performance and raised our earnings and margins levels. I remain proud and impressed with the way our organization has continued to deliver a strong performance throughout a challenging period.”