Category: Financial

  • JT Ups Guidance After Strong Quarter

    JT Ups Guidance After Strong Quarter

    Masamichi Terabatake (Photo: JT)

    Japan Tobacco reported revenue of ¥1.14 trillion ($10.45 billion) in the first six months of 2021, up 11.1 percent from the comparable 2020 period. Adjusted operating profit at constant currency increased 26.9 percent to ¥365.1 billion. On a reported basis, adjusted operating profit increased 24.5 percent to ¥358.2 billion. Operating profit was ¥322.1 billion, up 27.8 percent from the comparable six months in 2020.

    JT revised its revenue and adjusted operating forecasts upward by ¥120 billion and ¥10 billion, respectively.

    “JT Group delivered a robust performance in the first half, driven by strong business momentum. This was a result of continued market share gains in combustibles in many markets and continued tailwinds of strong industry volume trends due to travel restrictions in some mature markets,” said Masamichi Terabatake, president and CEO of the JT Group, in a statement.

    “Considering this robust performance, we have revised our full year guidance upward.

    “We have launched Ploom X, our next-generation device for heated-tobacco sticks in Japan, the world’s largest heated-tobacco market. Listening carefully to our consumers around the world, we have developed our first global model, offering a richer and enhanced taste, improved design and a more intuitive user experience. Ploom X will gradually be rolled out across other markets.

    “We are also making steady progress on several initiatives announced in February this year, including the rollout of our new operating model for the combined one tobacco business as well as measures to strengthen competitiveness in the Japan market. These initiatives will act as a catalyst for future growth while we continue to offer products and services which exceed our consumers’ expectations.”

  • Altria Raises Guidance on Strong Six Months

    Altria Raises Guidance on Strong Six Months

    Photo: Altria Group

    Altria Group’s net revenue was $6.9 billion in the second quarter, up 8.9 percent compared to the same quarter in 2020. Net revenue was $13 billion in the first half of 2021, up 1.9 percent compared to 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 Billy Gifford, Altria’s CEO, 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.”

  • Growth in New Category Sales for BAT

    Growth in New Category Sales for BAT

    Photo: BAT

    BAT reported revenue of £12.18 billion ($16.89 billion) for the six months that ended June 30, down 0.8 percent (up 8.1 percent on an adjusted basis) from the comparable 2020 period. Revenue from new categories increased by more than 50 percent to £883 million. Profit from operations totaled £4.91 billion, down 3.7 percent (up 5.4 percent on an adjusted basis) from the comparable six months a year earlier.

    “This has been an exciting period of growth in new categories, with new category constant currency revenue up by 50 percent in the first half,” said BAT CEO Jack Bowles in a statement. “We added 2.6 million consumers—our highest ever increase—to our noncombustible product consumer base to reach 16.1 million. This demonstrates our accelerating transformation driven by our multi-category portfolio, with continued key market share gains in all three new categories.

    “We are building strong, global brands of the future with Vuse, Velo and Glo. These are underpinned by industry-leading multi-category consumer insights and science with increasing digitalization. We have invested a further incremental £346 million in the first half, funded by continued value growth from combustibles and expect to reach our £1 billion Quantum savings target 12 months early. We have now increased our savings target to £1.5 billion by 2022.

    “Our rapid growth in new categories is driving significant scale benefits and 2021 is shaping up to be a pivotal year in our journey toward ‘A Better Tomorrow.’”

  • Kaival Brands to trade on NASDAQ

    Kaival Brands to trade on NASDAQ

    Image: immimagery

    Kaival Brands Innovations Group, the exclusive global distributor of products manufactured by Bidi Vapor, has been approved to list the company’s common stock on the Nasdaq Capital Market. The ticker symbol will remain unchanged, as “KAVL,” and the stock will begin trading on Nasdaq at the opening of the market on July 29, 2021.

    “I am pleased to announce that the company has been approved to begin trading on Nasdaq,” said Niraj Patel, Kaival’s founder and CEO, in a statement. “This event represents another monumental milestone in our company’s short history.”

    “We have worked diligently to achieve this goal and are humbled and grateful on the inclusion to the Nasdaq,” said Patel. “We are more enthusiastic than ever about being able to harness Kaival’s exciting potential.”

    “Step by step, we continue our work to build a world-class global organization—our elevation to Nasdaq represents a very large strategic evolution for the company,” noted Eric Mosser, chief operating officer of Kaival Brands.

  • ITC’s Cigarette Business Recovers from Low Base

    ITC’s Cigarette Business Recovers from Low Base

    Photo: Seemanta Dutta | Dreamstime.com

    ITC reported net revenue of INR12,217 crore in the first quarter of its fiscal year 2022, up 37 percent over the corresponding period of the previous year, reports Money Control. Net profit rose 28.6 percent to INR3,013.5 crore.

    Revenue from ITC’s mainstay cigarette segment jumped 33 percent during the first quarter in comparison to INR3,854 crore a year ago.

    The growth in topline was led by the company’s cigarette, FMCG and paper segments. The jump came on a low base as the first quarter of fiscal 2021 suffered from a significant decline in sales due to the onset of Covid-19 and a nationwide lockdown.

    By contrast, the second wave of the pandemic had limited impact on the segments.

    After severe disruptions in May, there has been week-on-week improvement in market conditions from mid-June, according to ITC, with most markets returning to normalcy and witnessing faster recovery compared to the first wave.

    “The pace of volume recovery is better, compared to the previous wave of Covid-19, aided by improved mobility, distribution expansion and new launches,” said Mehul Desai, analyst at Anand Rathi Shares and Stock Brokers. “Also, restrictions were not as severe as previous lockdowns.”

    ITC introduced several new cigarette variants, including Gold Flake Excel, Wills Navy Cut Filter and Berkeley Hero, during the quarter.

    The FMCG category, which includes several essential products, has helped the company tide over a difficult year. Its revenue from the segment stood at INR3,726 crore during the quarter as compared to INR3,375 crore in the year-ago period.

    Despite continued growth in FMCG, ITC continues to draw the highest share of its revenue from cigarettes, a matter of concern for analysts.

  • TPB Acquires Unitabac Cigar Portfolio

    TPB Acquires Unitabac Cigar Portfolio

    Photo: imur Anikin

    Turning Point Brands has acquired certain cigar assets of Unitabac. The acquisition comprises a portfolio of cigarillo products and related intellectual property, including cigarillo non-tip (NT) homogenized tobacco leaf (HTL), rolled leaf and natural leaf cigarillo products. The terms of the transaction were not disclosed.

    The acquired brands compete in three core segments: Trivo, Hype and Hi-Fi within the cigarillo NT HTL segment; Cloud9 within the natural leaf cigarillo segment; and Badlands within the rolled leaf segment. These cigars are all “grandfathered products” or subject of substantial equivalence reports in place with the U.S. Food and Drug Administration.

    “We are incredibly excited to welcome the Unitabac cigar brands to the Turning Point Brands family,” said Larry Wexler, CEO of Turning Point Brands, in a statement. “Industry analysts have highlighted that the multibillion-dollar cigarillo market growth is being fueled, in part, by the rapidly expanding movement toward cannabis legalization.

    “Gaining access to Unitabac’s product portfolio provides us with necessary assets to build a more competitive platform to participate in this large and growing market. Our intention is to leverage both the Zig-Zag tobacco brand strength and the extensive reach of our retail distribution platform to further penetrate the cigar category by introducing new line extensions under the Zig-Zag tobacco brand and expanding the reach of the Unitabac cigar products.”

    “Turning Point Brands’ deep knowledge of the evolving consumer experience, coupled with the company’s sales and marketing leadership, make the team an ideal partner for Unitabac,” said Rush Patel, founder of Unitabac. “With Turning Point Brands’ competitive advantages, grounded in superior marketing and distribution reach, I am confident our portfolio of products and brands developed over the past decade will continue to flourish under its forward-looking stewardship.”

    Turning Point Brands reported net sales of $122.6 million in the second quarter of 2021, up 16.8 percent over that reported in the 2020 second quarter. Gross profit increased 25.1 percent to $60 million and net income increased 49.2 percent to $15.4 million

    “Our second quarter performance continued to demonstrate Turning Point’s positive growth momentum, led by our core market segments. Zig-Zag had an exceptional quarter with over 70 percent growth, driven principally by our strategic initiatives and aided by a favorable comparison against a Covid-related disruption in MYO cigar wraps the previous year. Stoker’s also delivered a solid quarter fueled by double-digit growth in our MST business,” said Wexler in a press note.

  • PMI Reports Higher Quarterly Revenues

    PMI Reports Higher Quarterly Revenues

    Photo: PMI

    Philip Morris International reported net revenues of $7.59 billion in the quarter that ended on June 30, 2021, up 14.2 percent from the net revenues reported in the comparable 2020 quarter. Adjusted net revenues were $7.84 billion compared with $6.65 billion in the 2020 second quarter. Second-quarter 2021 operating income stood at $3.13 billion versus $2.73 billion for the previous year’s second quarter. Adjusted quarterly operating income was $3.45 billion, up from $2.8 billion a year ago.

    The company shipped 180.49 billion cigarettes and heated-tobacco units during the 2021 second quarter, 6.1 percent more than during the 2020 second quarter. Sales of heated-tobacco units increased 30.2 percent from the 2020 quarter to 24.36 billion units. Combustible cigarette sales increased by 3.2 percent to 156.14 billion sticks over the same period.

    “We delivered strong financial performance in the quarter, with adjusted diluted EPS of $1.57 up by 17.8 percent on an organic basis,” said Jacek Olczak, CEO of PMI, in a statement.

    “IQOS continued its impressive growth, surpassing an estimated 20 million total users by quarter-end and driving sequential quarterly heated-tobacco unit in-market sales volume growth of 8 percent. We expect this momentum to be bolstered by the launch of IQOS ILUMA starting next month in Japan.”

    “We are increasing our full-year adjusted outlook, with organic net revenue growth of 6 percent to 7 percent and adjusted diluted EPS growth of 12 percent to 14 percent on the same basis, mainly reflecting improved total industry volume. This outlook further supports our recently announced three-year share repurchase program of up to $7 billion.”

    “In addition, the proposed acquisitions of Fertin Pharma and Vectura Group will reinforce our long-term growth potential in the beyond nicotine space.”

    PMI’s adjusted net revenues exclude the impact related to a Saudi Arabia customs assessments. In June 2021, the Customs Appeal Committee in Riyadh notified the company’s distributors in Saudi Arabia of its decisions to largely reject their challenges of Saudi Arabia Customs General Authority assessments.

    Based on these decisions, PMI recorded a pre-tax charge of $246 million in the second quarter of 2021, resulting in a $0.14 per share adverse impact on the company’s reported diluted earnings per share. In accordance with U.S. generally accepted accounting principles, the charge was recorded as a reduction of net revenues on the consolidated statement of earnings.

  • Aspire Sets Terms for Public Offering

    Aspire Sets Terms for Public Offering

    Photo: Aspire Global

    Aspire Global, an e-cigarette and vaping brand, announced terms for its IPO on July 16.

    The Shenzhen, China-based company plans to raise $120 million by offering 15 million shares at a price range of $7 to $9, according to Renaissance Capital. At the midpoint of the proposed range, Aspire Global would command a market value of $1.3 billion.

    Aspire is a vertically integrated provider of e-cigarette vaporizing technology. Its tobacco vaping products are sold through a distribution network of more than 150 distributors in 30 countries. In December 2020, the company also commenced the marketing of cannabis vaping technology products in the U.S.

    Aspire Global was founded in 2010 and booked $82 million in sales for the 12 months ended Dec. 31, 2020. It plans to list on the Nasdaq under the symbol ASPG. Tiger Brokers, EF Hutton, TF International and China Merchants Securities are the joint bookrunners on the deal.

    Aspire Global would be the second Chinese vaping company to list on the New York Stock Exchange. Unlike RLX Technology, which is being sued for misleading investors about regulatory risks in China, Aspire sells most of its products outside the Chinese market.

  • Momentum Continues for Swedish Match

    Momentum Continues for Swedish Match

    Lars Dahlgren (Photo: Swedish Match)

    Swedish Match reported sales of SEK4.5 billion ($518 million) in the second quarter of 2021, up 9 percent from those reported in the second quarter of 2020. Operating profit was SEK1.96 billion compared with SEK1.69 billion in the 2020 quarter. The company’s operating margin increased to 45 percent from 42.9 percent from quarter to quarter.

    The performance was driven by continued momentum for Swedish Match’s ZYN nicotine pouch in the U.S. Sales and operating profit also grew in Scandinavia.

    For the cigars product segment, sales and operating profit were up significantly in local currency compared to a relatively soft prior year period due to improved pricing and increased natural leaf shipments.

    “Following an impressive financial performance in the first quarter, Swedish Match today reported another quarter with double-digit sales and operating profit growth across all product segments in local currencies,” said Swedish Match CEO Lars Dahlgren in a statement.

    “Our strategic focus on growing categories and segments is paying off as consumers are seeking alternatives and enhanced experiences.”

    “Swedish Match is very well positioned to build upon its strong platforms, and we are excited to determinedly pursue the growth opportunities that lie ahead while working toward our vision of a world without cigarettes.”

  • Kaival Splits Stock for NASDAQ Listing

    Kaival Splits Stock for NASDAQ Listing

    Photo: Randy Harris

    Kaival Brands, the exclusive global distributor of all products manufactured by Bidi Vapor, has implemented a 1-for-12 reverse split of its common stock, effective prior to the opening of the market on July 20, 2021. The reverse stock split was implemented by the company in support of its application to list on the NASDAQ Capital Market.

    As a result of the reverse split at the 1-for-12 ratio, every 12 shares will be exchanged for one share of the common stock.

    “We are excited for the new phase of Kaival’s capital markets development as we progress to listing on the NASDAQ,” said Niraj Patel, CEO of Kaival Brands, in a statement.

    “Our board carefully considered the decision to effect the reverse split of our shares, which is critical for us to list on NASDAQ based on our current stock price. A reverse split is designed as an economically neutral, mathematical event that does not affect the intrinsic value of the company. While many companies execute reverse splits to avoid being delisted, our reverse split is in fact being done for just the opposite reason: to become qualified to list on the NASDAQ, which we believe will have many benefits for our company and shareholders.”

    The reverse split is intended to increase the per share stock price of the company’s common stock in order to meet NASDAQ’s requirement that the company’s common stock be $4 or higher as of the listing date. Prior to listing its common stock on NASDAQ, the company’s application must be approved.

    The company does not intend to issue fractional shares in connection with the reverse stock split. In order to avoid fractional shares of common stock, the number of shares issued to each stockholder will be rounded up to the nearest whole number in the event a stockholder would be entitled to receive less than one share of common stock as a result of the split. The reverse split will not affect any holder of the company’s common stock’s proportionate voting power, and all shares of common stock will remain fully paid and nonassessable.