Category: Financial

  • Scandinavian Raises Full-Year Guidance

    Scandinavian Raises Full-Year Guidance

    Photo: STG

    Scandinavian Tobacco Group (STG) reported net sales of DKK2.16 billion ($338.61 million) in the second quarter of 2021, with 7.5 percent organic growth from the comparable 2020 quarter. EBITDA before special items was DKK606 million (from DKK489 million in the second quarter of 2020) with 20.8 percent organic growth. The EBITDA margin was 28.1 percent (23.3 percent).

    The company attributed its performance to a continued high demand in handmade cigars in the U.S., a favorable market mix and synergies from the integration of Agio Cigars. The second quarter of last year was negatively impacted by the early phases of the Covid-19 pandemic, making comparisons relatively easy.

    “We deliver a strong quarterly performance with growth in both net sales and EBITDA driven by strong sales of handmade cigars in the U.S. and a favorable mix,” said STG CEO Niels Frederiksen in a statement. “We expect continued high demand for handmade cigars for the rest of the year, and we are raising our financial expectations for 2021 to reflect that. Additionally, we continue to implement our ‘Rolling toward 2025’ strategy and show good progress on the transformation of the company.”  

    According to STG, the current high consumption of handmade cigars in the U.S. combined with a strong market mix have driven the extraordinarily strong net sales growth during the first half of 2021. The company expects growth to taper off during the second half of the year as year-on-year comparisons are more difficult, especially in the third quarter and as the market mix is expected to normalize somewhat. However, the full year is now expected to be stronger than previously anticipated, although the risks remain higher than normal due to Covid-19.

  • Altria Revenues up in Quarter and First Half

    Altria Revenues up in Quarter and First Half

    Photo: JHVEPhoto

    Altria Group reported net revenues of $6.94 billion in the second quarter of 2021, up 8.9 percent over those reported in the comparable 2020 quarter. Revenues net of excise taxes were $5.61 billion (up 10.9 percent). For the first six months of 2021, Altria’s net revenues were up 1.9 percent, to $12.97 billion, from the 2020 first half. Revenues net of excise taxes were $10.49 billion the first half, 3.8 percent more than those reported in the first six months of 2020.

    “Altria delivered outstanding results in the second quarter thanks to the continued strength of our tobacco businesses and the hard work of our highly talented employees,” said Altria CEO Billy Gifford in a statement. “Our teams have continued their commitment to ‘Moving Beyond Smoking’ by deepening their understanding of adult tobacco consumer preferences, expanding the awareness and availability of our smoke-free product portfolio and amplifying our voice on harm reduction within the scientific and public health communities.”

    “With our strong financial performance in the first half, we have raised the lower end of our full-year 2021 adjusted diluted EPS guidance range and now expect full-year adjusted diluted EPS to be in the range of $4.56 to $4.62, representing a growth rate of 4.5 percent to 6 percent from a $4.36 base in 2020. This updated guidance reflects continued confidence in our tobacco businesses, investments in smoke-free products and the expected impact of the recently announced agreement to sell our Ste. Michelle Wine Estates business.”

  • PMI Enters Tender Period with Vectura

    PMI Enters Tender Period with Vectura

    Photo: Tobacco Reporter archive

    Philip Morris International has published an offer document with U.K.-based Vectura Group in connection with the recommended cash offer to acquire the inhaled therapeutics company. Under the terms of the acquisition, Vectura shareholders would be entitled to receive 165 pence per share, a 60 percent premium to the ex-dividend closing price of 103 pence per Vectura share on May 25, 2021.

    “PMI’s acquisition of Vectura is part of our long-term strategy to transform PMI by investing in scientific excellence and leveraging its capabilities and expertise,” said PMI CEO Jacek Olczak. “Our investment will accelerate the development and delivery of inhaled therapeutics to address many of today’s unmet medical needs. We look forward to working with Vectura’s great people as we embark on the next stage of our transformation.”

    In a press note published on its website, PMI also detailed the ways in which it would support Vectura’s growth. Among other things, the cigarette manufacturer intends to build on the company’s leading scientific capabilities to develop products and services that go beyond nicotine.

  • 22nd Century Rings NASDAQ Closing Bell

    22nd Century Rings NASDAQ Closing Bell

    Screen capture of the NASDAQ video

    22nd Century Group rang the Nasdaq Closing Bell on Aug. 16, 2021, in celebration of the transfer of its stock listing to the Nasdaq Capital Market from the NYSE American. The company’s common stock began trading at that day’s market opening under the same ticker symbol, “XXII.”

    “We are thrilled to join the Nasdaq family, and it’s an honor to celebrate our listing with today’s closing bell ceremony,” said James A. Mish, chief executive officer of 22nd Century Group, in a statement.

    “The visibility and exposure we will gain through our uplisting to Nasdaq is an important part of our efforts to build toward the future. Along with our primary mission to reduce the harm caused by smoking, we are actively focused on positioning 22nd Century for long-term revenue growth and driving value creation across multiple plant franchises and global market opportunities.”

    A video of the 22nd Century closing bell ceremony is available here.

  • Pyxus Improves Revenues and Net Loss

    Pyxus Improves Revenues and Net Loss

    Pieter Sikkel (Photo: Pyxus International)

    Pyxus International reported sales and other operating revenues of $333.3 million for the three months ended June 30, 2021, up 26.8 percent from $262.8 million for the three months ended June 30, 2020. Gross profit as a percent of sales increased to 12.6 percent from 7.5 percent. Net loss improved 87.5 percent to $11.5 million while adjusted earnings before interest, taxes, depreciation and amortization increased 92.2 percent to $14.8 million.

    “Fiscal year 2022 is progressing nicely and is in line with our expectations thus far. In the first quarter, we began to catch up from prior-period shipping delays driven by the pandemic and customer shipping instructions,” said Pieter Sikkel, president and CEO of Pyxus, in a statement.

    “In the leaf business, our inventory levels are consistent with our expectations, and our uncommitted inventory decreased compared to the prior year. We continue to see customers look for ways to reduce complexity in their supply chains through partnerships with suppliers who support their environmental, social and governance objectives. British American Tobacco’s Indonesian subsidiary recently adopted a new leaf supply arrangement, which involves shifting contract volumes from its direct operations to one of our tobacco subsidiaries. Effective this crop season, we will begin processing the additional volume in our local facilities prior to its sale to BAT.

    “With regards to e-liquids, we are encouraged that the Food and Drug Administration is continuing to take action against illegally marketed tobacco products, as evidenced by the most recent warning letters requesting certain companies remove their flavored disposable e-cigarettes and youth-appealing e-liquid products from the market because they do not have the required premarket tobacco product applications.

    “Momentum is building across the business 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 nonrecurring items and potential changes in foreign currency exchange rates), and adjusted EBITDA to be between $150 million and $170 million. Our global team is committed to the strengthening of our business while making positive contributions to a sustainable world.”

  • Media Report Triggers Sell-off of Vapor Stocks

    Media Report Triggers Sell-off of Vapor Stocks

    Photo: Cozyta

    E-cigarette stocks fell on Aug. 5 after Chinese state media ran reports about the risks of vaping, reports Reuters.

    Huabao International Holdings tumbled 8 percent in Hong Kong morning trade while China Boton Group Co. fell 4 percent. Market leader Relx Technology closed almost 5 percent lower in New York after the Xinhua news agency published a report saying that minors were gaining easy access to e-cigarettes.

    Xinhua said its reporters made unannounced visits to e-cigarette shops in the northern cities of Tianjin and Shenyang and found that while all had signs stating sales to minors were prohibited, enforcement of the law varied in practice.

    The sell-off demonstrated how investors remain on edge and on the hunt for clues about which companies might be vulnerable to state intervention after the property, education and technology sectors were hit by Beijing regulators in recent months with unprecedented sweeping rules.

    Similar market sentiment took hold of liquor-related stocks after the Ministry of Science and Technology posted an article citing a study that linked alcohol consumption to cancer.

    Investors in Chinese companies often scrutinize state media reports for hints about regulators’ thinking.

    China is the world’s largest consumer of tobacco products, with more than 300 million smokers, according to the World Health Organization.

  • KT&G Quarterly Profit Down on Strong Won

    KT&G Quarterly Profit Down on Strong Won

    Photo: mnimage

    KT&G Corp.’s second-quarter net profit fell 16 percent from a year earlier, primarily due to a strong won.

    Net profit for the three months that ended in June was KRW246.4 billion ($215 million) compared with KRW293 billion in the comparable 2020 period, the company said in an earnings release.

    “The won’s strength [against the U.S. dollar] drove down the dollar-denominated earnings [when converted into the local currency],” a company spokesman told the Yonhap News Agency.

    Operating profit declined 16 percent to KRW330.14 billion in the second quarter from KRW394.12 billion a year ago. Sales rose 2.1 percent to KRW1.35 trillion from KRW1.32 trillion during the comparable 2020 quarter.

    KT&G sold 10.34 billion cigarettes in South Korea in the first three months, 170 million fewer than a year earlier. It accounted for 64 percent of the domestic cigarette market.

    Its overseas sales fell 14 percent to 11.9 billion cigarettes from a year earlier due to weaker demand from the Middle East.

    KT&G has tobacco factories in South Korea, Russia, Turkey and Indonesia with a combined annual capacity that reached 13.6 billion cigarettes.

  • 22nd Century to Start Trading on Nasdaq

    22nd Century to Start Trading on Nasdaq

    Photo: Randy Harris

    The common stock of 22nd Century Group has been approved for uplisting to the Nasdaq Capital Market effective as of the market open on Aug. 16, 2021. The shares will continue to trade under the ticker symbol “XXII.”

    “While remaining dedicated to our primary mission to reduce the harm caused by smoking, uplisting to the Nasdaq also aligns 22nd Century with other high-achieving, innovative and growth-oriented global science and technology companies,” said James A. Mish, CEO of 22nd Century Group, in a statement.

    “We believe that joining the Nasdaq will enhance our visibility to a wide audience of institutional investors and increase our exposure to hemp/cannabis investors at this important time of industry progression toward mass production.”

  • Quarterly Sales and Income up for Universal

    Quarterly Sales and Income up for Universal

    Photo: Universal Corp.

    Universal Corp. reported sales and other operating revenue of $350 million in the three months that ended June 30, 2021, up 11 percent over that reported in the comparable 2020 quarter. Operating income was up 24 percent to $10.6 million. On an adjusted basis, operating income increased 190 percent to $12.6 million. The company’s gross profit margin was up 80 base points to 17.8 percent.

    “We are off to a good start for fiscal year 2022,” said George C. Freeman, III, chairman, president and CEO of Universal, in a statement. “Results for our tobacco operations segment improved on higher African carryover tobacco shipments and a favorable tobacco product mix in the three months ended June 30, 2021, compared to the three months ended June 30, 2020. Our ingredients operations segment, which includes our October 2020 acquisition of Silva International Inc., delivered very strong performance in the three months ended June 30, 2021.

    “It is exciting to begin to see the positive outcome from our capital allocation strategy, which we put in place in May 2018 with the goal of ensuring that we are well positioned for the future. Investments in our tobacco business have enabled us to expand the supply chain services we provide our customers and to create footprint rationalization efficiencies, and we are seeing the returns from those investments in our results.”

    Freeman said Covid-19-related vessel and container shortages had created logistical restraints for many industries, but the company was not yet able to determine what, if any, impact those constraints would have on shipment timing or its results.

    “We are continuing to monitor these and other pandemic-related conditions which affect our operations,” he said.

  • SWM Announces Second-Quarter Results

    SWM Announces Second-Quarter Results

    Photo: SWM

    Schweitzer-Mauduit International reported sales of $377.8 million in the second quarter of 2021, up 48.6 percent (11 percent on organic basis) from the comparable 2020 quarter. GAAP operating profit was $15.9 million, down $18.5 million, and included $19.2 million of transaction costs and incremental purchase accounting expenses driven by the acquisition of Scapa, which closed April 15, 2021. Adjusted operating profit was $44.6 million, up 3 percent from a year ago.

    Engineered Papers segment sales were $125.8 million, up 4 percent, driven by a 3 percent volume increase, unfavorable price/mix of 4 percent and a 6 percent currency benefit, primarily related to the euro.  The volume performance was attributable to growth in nontobacco products, such as battery papers, furniture laminates and packaging. The negative price/mix effect was primarily a function of lower low-ignition propensity volumes as certain customers resumed more normalized order patterns versus 2020 when they built inventories. Accelerated growth in reduced-risk heat-not-burn products continued to be a positive driver within the tobacco business.

    “The strength of our portfolio was again evident during the quarter as an increase in global economic activity drove very strong demand across the business,” said Jeff Kramer, CEO of SWM, in a statement.

    “Excluding the benefit of the Scapa acquisition, overall sales increased double-digits, and we are confident that robust order activity will continue in the coming quarters. We also closed and began integrating the largest acquisition in our history as Scapa joined our portfolio, putting us in even better position to drive sustainable long-term profit growth. And while we were not immune to global supply chain challenges, our teams again demonstrated their flexibility and skill in delivering against these increased volumes, resulting in second-quarter adjusted EPS of $0.90.”