Category: Financial

  • Japan Tobacco Lowers Forecast

    Japan Tobacco Lowers Forecast

    Photo: Tobacco Reporter archive

    Japan Tobacco’s (JT) reported revenue of ¥1.03 trillion ($9.84 billion) in the first six months of 2020, 2.7 percent less than in the first half of 2019. Growth in the international tobacco business was unable to offset declines in other business, according to the company. JT estimates the Covid-19 pandemic to have had an unfavorable impact on its business of around ¥35 billion.

    JT’s adjusted operating profit was ¥287.6 billion over the six months (down 0.1 percent over the 2019 period) while its operating profit declined by 19.1 percent to ¥252 billion. Profit declined by 23.8 percent over the reporting period.

    The company enjoyed significant favorable pricing gains in the international business, but robust currency-neutral performance was offset by stronger currency headwinds than initially assumed.

    Operating profit and profit were impacted by a non-recurring one-time 2019 gain in JT’s pharmaceutical business, along with higher financing cost.

    Volume trends in Japan returned to levels prior to the Covid-19-related state of emergency declaration after significant declines in April and May.

    Anticipating lower tobacco volumes due to the Covid-19 impact and stronger currency headwinds, JT adjusted its fiscal 2020 forecast downward. The company now anticipates revenue of ¥2.01 trillion and adjusted operating profit of ¥457 billion for the full year.

    “Although the tobacco industry was not immune to the impact of the pandemic, our performance was resilient during the first half of 2020,” said Masamichi Terabatake, president and CEO of the JT Group. “JT Group maintained solid business momentum and delivered robust growth in adjusted operating profit at constant currency driven by pricing gains in the international tobacco business.

    “We have revised our forecasts based on reasonable assumption to date considering the current momentum, business environment and widening impact of currency volatility among other aspects. We believe that our solid business momentum will continue, despite of the Covid-19 challenges on our top-line.”

     

  • Altria Reestablishes 2020 EPS Guidance

    Altria Reestablishes 2020 EPS Guidance

    Photo: Altria

    Altria Group announced its 2020 second-quarter and first-half business results and reestablished 2020 adjusted diluted earnings per share (EPS) guidance. It also announced an increase in its quarterly dividend ahead of its previously scheduled dividend declaration date.

    Net revenues were down 3.8 percent to about $6.4 million from the second quarter of 2019.

    “Over the first half of 2020, we believe Altria showed resilience in volatile market conditions, growing adjusted diluted earnings per share by 8.5 percent, driven by the outstanding financial performance of our core tobacco businesses,” said Billy Gifford, Altria’s CEO. “We’ve also hit key milestones and made steady progress behind our noncombustible product portfolio.”

    “With a better understanding of Covid-19 impacts on adult tobacco consumer purchasing behavior and an additional quarter of ABI earnings contributions, we’re reestablishing full-year 2020 adjusted diluted EPS guidance.”

    Altria expects its 2020 full-year adjusted diluted EPS to be in a range of $4.21 to $4.38, representing a growth rate of 0 percent to 4 percent from an adjusted diluted EPS base of $4.21 in 2019.

    “We’re pleased to announce that yesterday, our board declared a quarterly dividend of $0.86 per share, representing a new annualized dividend rate of $3.44 per share and an increase of 2.4 percent from the previous annualized rate of $3.36 per share,” said Sal Mancuso, Altria’s chief financial officer. “This dividend increase marks the 55th dividend increase in the past 51 years.”

    To date, Altria recorded net pre-tax charges of $50 million, directly related to costs for disruptions caused by, or efforts to mitigate the impact of, the Covid-19 pandemic. These pre-tax charges included premium pay, personal protective equipment and health screenings, partially offset by certain employment tax credits.

    Altria said its tobacco businesses have not experienced any material adverse effects associated with governmental actions to restrict consumer movement or business operations but continue to monitor these factors. Most retail stores in which their products are sold, including convenience stores, have been deemed to be essential businesses by authorities and remain open.

  • Sales and Profit up at Turning Point Brands

    Sales and Profit up at Turning Point Brands

    Photo: Tobacco Reporter archive

    Turning Point Brands (TPB) announced its second-quarter results and increased its 2020 guidance.

    Net sales increased 12.5 percent to $105 million, and gross profit increased 16.8 percent to $48.1 million. Net income decreased $4 million to $9.2 million, reflecting the inclusion of expensing premarket tobacco product application (PMTA) costs incurred during the current quarter compared to the net gain related to a settlement from the V2 winddown in the previous year’s quarter. Adjusted EBITDA increased 24.8 percent to $22.8 million.

    Absent any further acquisitions, the company projects 2020 net sales to be $370 million to $382 million (up from previous guidance of $338 million to $353 million). It projects 2020 adjusted EBITDA of $78 million to $83 million (up from previous guidance of $69 million to $75 million). Its projections assume no upside from the PMTA process in 2020.

  • Pyxus Receives Major Support From Creditors for Plan

    Pyxus Receives Major Support From Creditors for Plan

    Pyxus International, a global value-added agricultural company, announced that its Prepackaged Plan of Reorganization of Pyxus International and its Affiliated Debtors was overwhelmingly approved by each class of creditors entitled to vote.

    Of those that submitted ballots, holders of 100 percent of first lien notes (holding over $266 million of principal) and over 99 percent of the second lien notes (holding over $524 million of principal) voted in favor of the Prepackaged Plan.

    In addition, on July 22, 2020, the Bankruptcy Court presiding over the company’s Chapter 11 cases approved the company’s entry into a commitment letter for a $75 million revolving credit facility to be provided by Sound Point Capital upon the effective date of the Prepackaged Plan, subject to satisfaction or waiver of certain conditions.

    “The level of support from our first lien and second lien noteholders in favor of the Prepackaged Plan, and the commitment from Sound Point to finance the company’s go-forward working capital needs, reflects their collective confidence in our proposed restructuring transaction and future business strategy,” said Pieter Sikkel, Pyxus’ president and CEO. “The Company looks forward to working with its creditors and its other constituents to complete its restructuring process and emerge from the Chapter 11 in the near term.”

    The hearing to consider approval of the Prepackaged Plan is scheduled for August 18, 2020 at 9:30 a.m. ET.

  • Support for Pyxus Reorganization Plan

    Support for Pyxus Reorganization Plan

    Photo: Pyxus International

    Creditors have approved Pyxus International’s plan for reorganization, the agricultural company announced today.  

    Of those that submitted ballots, holders of 100 percent of first lien notes (holding over $266 million of principal) and over 99 percent of the second lien notes (holding over $524 million of principal) voted in favor of the Prepackaged Plan.

    In addition, on July 22, 2020, the Bankruptcy Court presiding over the company’s Chapter 11 cases approved the company’s entry into a commitment letter for a $75 million revolving credit facility to be provided by Sound Point Capital upon the effective date of the prepackaged plan, subject to satisfaction or waiver of certain conditions.

    “The level of support from our first lien and second lien noteholders in favor of the Prepackaged Plan, and the commitment from Sound Point to finance the company’s go-forward working capital needs, reflects their collective confidence in our proposed restructuring transaction and future business strategy,” said Pieter Sikkel, Pyxus’ president and CEO. “The company looks forward to working with its creditors and its other constituents to complete its restructuring process and emerge from the Chapter 11 in the near term.”

    The hearing to consider approval of the prepackaged plan is scheduled for August 18, 2020 at 9:30 a.m. ET.

     

  • PMI Quarterly Results ‘Above Expectations’

    PMI Quarterly Results ‘Above Expectations’

    Photo: Taco Tuinstra

    Philip Morris International (PMI) has released its second-quarter results and reinstated its 2020 forecast.
     
    Diluted earnings per share were down by 16.1 percent, and net revenues were down by 13.6 percent. Operating income was down by 14.3 percent.
     
    Market share for heated-tobacco units in IQOS markets rose by 1.8 points to 6.3 percent.
     
    “Despite a very challenging quarter due to the pandemic, we delivered results above our previously communicated expectations for both net revenues and reported diluted EPS,” said Andre Calantzopoulos, PMI’s chief executive officer.
     
    “This primarily reflected favorable sequential performance in June, with a strong industry volume recovery—notably in the higher margin EU region—and substantial IQOS user acquisition growth as well as the benefit of certain nonunderlying factors, some of which we expect to reverse in the third quarter.”
     
    PMI reinstated its 2020 full-year forecast after withdrawing it in April due to uncertainty surrounding the Covid-19 pandemic. The “forecast represents a projected increase of approximately 2 percent to 5 percent versus pro forma adjusted diluted earnings per share of $5.13 in 2019,” according to PMI.

  • Zyn Boosts Swedish Match’s Second Quarter

    Zyn Boosts Swedish Match’s Second Quarter

    Photo: Swedish Match

    Swedish Match reported a strong second quarter, driven largely by sales of its Zyn tobacco-nicotine pouches in the United States.

    In local currencies, Swedish Match’s sales increased by 11 percent for the second quarter. Reported sales increased by 11 percent to SEK4.13 billion ($457.18 million).

    In local currencies, operating profit from product segments) increased by 19 percent for the second quarter. Reported operating profit from product segments increased by 17 percent to SEK1.7 billion.

    Operating profit amounted to SEK1,67 billion for the second quarter. Profit after tax amounted to SEK1,23 billion for the second quarter.

    According to Swedish Match, the second quarter financial performance was negatively affected by Covid-19 impacts.

    “The strength of the second-quarter performance was largely attributable to the continued success of Zyn in the U.S., with shipments in the first half of the year already exceeding total shipments for 2019,” said Lars Dahlgren, CEO of Swedish Match.

    “Shipment volumes for our Scandinavian smokefree business declined in the quarter versus the prior year as deliveries to travel retail and border trade outlets were severely impacted by COVID-19 travel restrictions.”

     

     

     

     

     

     

     

  • Smoore Stock Soars After Hong Kong IPO

    Smoore Stock Soars After Hong Kong IPO

    The share price of Smoore increased significantly after its launch on the Hong Kong Exchange last week. After an initial public offering of HKD12.40 ($1.60) per share, the stock closed at HKD31 on Friday.

    “As the global leader in offering vaping technology solutions, Smoore’s mission is to build the world’s leading vaping technology platform to bolster the innovation and development of vaping technology with a wide range of applications,” said Smoore spokesperson Cloris Li.

    “In the next three to four years, Smoore plans to invest more in improving production capacity and upgrading equipment, including setting up new manufacturing facilities and research institute of group level as well as installing automated production lines and IT equipment.”

    According to Frost & Sullivan, a business consulting firm, Smoore is the world’s largest vapor device manufacturer in terms of revenue, accounting for 16.5 percent of the total market share in 2019.

    “In the past 14 years, we have been firmly grounded to focus on advanced R&D technology, strong manufacturing capacity, wide-spectrum product portfolio and diverse customer base. We are glad about what we have achieved and will take this as a new start,” said Li.

    The Shenzhen-based company offered 574 million shares, according to the company’s prospectus, and had indicated the stock would be priced between HKD9.60 and HKD12.40 per share.

    “After being listed on the Hong Kong stock market, Smoore is probably going to be able to invest more in the R&D and application of heating technology, for instance, in the medical atomization arena,” said Li. “Meanwhile, we are able to better serve our clients and provide a better life for our employees. As a leader in this field, Smoore is also able to play a more important role in shaping the industry and the whole of society.”

  • Turning Point Exceeds Quarterly Expectations

    Turning Point Exceeds Quarterly Expectations

    Photo: Stocksnap from Pixabay

    Turning Point Brands (TPB) announced preliminary sales results for the second quarter ended June 30, 2020, in connection with the underwritten secondary offering by certain of its stockholders of 2 million shares of TPB’s common stock. TPB plans to release its full second-quarter 2020 financial results along with updated full-year guidance on July 28, 2020.

    During the second quarter of 2020, preliminary estimates of net sales exceeded $100 million compared to net sales guidance of $81 million to $87 million provided on April 28, 2020. All segments outperformed management expectations for the second quarter of 2020.

    In the smokeless segment, the secular consumer downtrading trends that accelerated earlier in the year continued during the quarter as the Stoker’s MST line continues to build momentum and gain consumer acceptance.

    In the smoking segment, sales benefited from increased consumption, new product penetration and recently implemented growth initiatives, which offset the Covid-related supply chain disruption experienced in the MYO cigar wraps business. In the new generation segment, market share gains and new product introductions returned the segment to positive year-over-year sales growth.

    TPB announced the pricing of the previously announced underwritten public offering of 1.8 million shares of company common stock by Standard Diversified and an aggregate of 200,000 shares of company common stock by funds affiliated with Standard General (the Standard General funds) at an offering price of $23.50 per share. In addition, the Standard General funds have granted the underwriter the option to purchase up to 215,000 shares of the company’s common stock from them to cover over-allotments, which will be exercisable for two business days.

    The selling stockholders will receive all the net proceeds from the offering. The closing is expected to occur on or about July 13, subject to customary closing conditions. The shares are listed on the New York Stock Exchange under the symbol TPB.

  • Smoore Raises $918 Million in Hong Kong

    Smoore Raises $918 Million in Hong Kong

    Photo: Timonthy Donahue

    Smoore International has raised $918 million in its initial public offering (IPO) at the Hong Kong Stock Exchange, reports Reuters. The deal is the largest IPO in Hong Kong since the start of 2020.

    The Shenzhen, China-based firm offered 574 million shares, according to the company’s prospectus, and had indicated the stock would be priced between HKD9.60 ($1.24) and HKD12.40 per share.

    The largest investors were Huaneng Trust, which took $80 million worth of stock, and Prime Capital which took $50 million, according to Smoore’s prospectus.

    In 2019, Smoore reported a profit of CNY2.17 billion ($307.8 million), up from CNY733.9 million one year earlier.

    Smoore is due to start trading on the Hong Kong Stock Exchange on Friday.