Philip Morris International (PMI) has declared a regular quarterly dividend of $1.17 per common share, payable on July 10, 2020, to shareholders of record as of June 22, 2020. The ex-dividend date is June 19, 2020.
PMI will also host a live audio call of a presentation and question and answer session by Jacek Olczak, chief operating officer, and Emmanuel Babeau, chief financial officer, at the Deutsche Bank Global Consumer Conference on June 11, 2020, at approximately 7:00 a.m. Eastern Time.
The call will be held in a virtual format and provide a live audio of the entire PMI session in a listen-only mode. Participants can register at PMI’s website to receive dial-in instructions and numbers.
Universities Superannuation Scheme, Britain’s largest private pension scheme by assets, will stop investing in tobacco manufacturing and other sectors it deems “financially unsuitable” over the long term.
Companies that make more than 25 percent of their revenues from thermal coal and those with ties to controversial weapons such as cluster munitions, landmines and white phosphorus will also be excluded, the fund said in a statement on Monday.
Universal Corp. reported net income for the fiscal year ended March 31, 2020, of $71.7 million, compared with $104.1 million for the prior fiscal year. Excluding restructuring and impairment costs and certain nonrecurring items, net income declined by $25.3 million. Operating income was $126.4 million for the fiscal year, down from $161.2 million for the fiscal year ended March 31, 2019.
Results reflected earnings declines in Universal’s North America and Other Regions segments, partially offset by earnings improvements in the company’s Other Tobacco Operations segment.
George C. Freeman III
“We could not have predicted that we would be closing out our fiscal year in the throes of a global pandemic,” said George C. Freeman, III, chairman, president and CEO of Universal.
“Uncertain market conditions, mainly driven by the ongoing Covid-19 pandemic, led to extreme weakening of the Indonesian rupiah, Brazilian real and Mexican peso relative to the U.S. dollar, all of which experienced double-digit depreciation during the month of March.”
These currency weaknesses were the primary drivers for unfavorable currency comparisons, according to Freeman.
“Towards the end of our fiscal year, we also saw some shipment delays in certain regions due to the Covid-19 pandemic and slower customer orders, which increased our uncommitted inventory levels,” said Freeman.
“In addition, as we have discussed throughout the fiscal year, our results for fiscal year 2020 have been negatively impacted by lower carryover volumes compared to fiscal year 2019, mainly in North America and Africa. Our gross margins for fiscal year 2020, however, remained relatively flat compared to fiscal year 2019.”
While some of Universal’s processing facilities experienced partial or total closures due to Covid-19, nearly all operations have resumed with measures to protect employees against infection, according to Freeman.
In related news, Universal declared a quarterly dividend of $0.77 per share, payable August 3, 2020.
“Today’s dividend increase is a milestone for our company,” said Freeman. “It is our 50th consecutive annual dividend increase, and we are very proud of this achievement. It represents the continuation of our strong record of returning value to our shareholders through our consistent dividend delivery. We have raised our common dividend every year since 1971.”
Universal’s annual meeting of shareholders will take place August 4, 2020.
In the first quarter of 2020, Scandinavian Tobacco Group delivered net sales of DKK1.79 billion ($263.56 million), showing an organic net sales growth of 5 percent. The first quarter of 2020 includes the integration of Agio Cigars.
The company has updated its 2020 financial guidance after seeing the outcome of the first quarter and gaining a better understanding of how Covid-19 may affect the company in the coming quarters. It expects the EBDITA to grow more than 2 percent and free cash flow to be about DKK850 million.
Niels Frederiksen
The guidance is based on assumptions of a moderate decline in organic net sales growth for the full year with the highest decline in organic net sales growth in the second quarter and a gradual normalization over the third and fourth quarter as markets reopen and with no material disruptions to the supply chain. The company expects a contribution from cost savings in relation to the integration of Agio Cigars of about DKK70 million to DKK80 million in 2020 as well as further benefits from the Fueling the Growth program. Special costs are expected to be about DKK415 million to DKK435 million, including a noncash impairment charge of DKK109 million. The intention to initiate the previously announced share buyback program at a total value of up to DKK300 million remains unchanged.
“In the middle of a unprecedented global pandemic with a high degree of volatility and uncertainty in most markets, we are able to present a solid result for the first three months of 2020 with net sales growth and a strong cash flow as well as we have revealed the plans for creating significant value with the integration of Agio Cigars,” said Niels Frederiksen, CEO of Scandinavian Tobacco.
Pyxus International has reportedly begun talks with creditors regarding a possible bankruptcy filing, according to an article in the Wall Street Journal.
The filing is potentially related to declining cigarette consumption and the Covid-19 pandemic following the company’s struggle to make headway in the cannabis and vapor sectors.
U.S. President Donald Trump threatened to permanently end U.S. funding of the World Health Organization (WHO) amid accusations that the agency allowed China to cover up the coronavirus outbreak in the early stages.
Trump stated that the WHO must “actually demonstrate independence from China” and “commit to substantive improvements within the next 30 days,” but Chinese officials claimed that Trump was trying to shift the blame for his administration’s “incompetent response” to the pandemic, according to the Washington Post.
The threat to end WHO funding came after Trump stated that he has been taking hydroxychloroquine as a preventative for Covid-19. Experts have continuously urged people not to take this drug outside of hospitals or clinical trials as it can cause heart problems and other side effects, including death, and has not been proven to help prevent Covid-19 infections. The drug is usually used to treat lupus, rheumatoid arthritis and malaria.
Imperial Brands’ adjusted tobacco and next-generation product (NGP) revenue for the six months ending March 31, 2020, was down 1.7 percent from the same period last year.
The company’s total adjusted operating profit also fell 9.3 percent. On a reported basis, revenue rose 2 percent while total operating profit fell 19.6 percent.
“While we delivered against our revised expectations, we are disappointed with these results, and we remain fully focused on all opportunities to strengthen performance,” said Dominic Brisby and Joerg Biebernick, joint interim chief executives for Imperial Brands.
“We would like to thank our employees for their hard work and commitment in these challenging times. Their support has been outstanding, and we continue to prioritize their health, safety and well-being.
“Our enhanced focus on tobacco has driven stronger in-market execution and an improved share performance, with gains in most of our priority markets. We have reduced our NGP spend following the poor returns on investment last year, and this, together with recent weaknesses in the vapor category, has resulted in lower NGP revenue.
“Overall, Covid-19 has so far had only a small impact on trading, but we expect this to be more pronounced in the second half due to continued pressures on our duty-free and travel retail business, changes in consumption patterns including downtrading and a reversal of some first-half inventory build.”
Altria Group’s board of directors has declared a regular quarterly dividend of $0.84 per share, payable on July 10, 2020, to shareholders of record as of June 15, 2020. The ex-dividend date is June 12, 2020.
The announcement followed Altria’s 2020 annual meeting of shareholders on May 14. During the meeting, Altria CEO Billy Gifford summarized the company’s full-year 2019 and first-quarter 2020 financial results, discussed Altria’s 10-Year vision, corporate responsibility priorities and environmental, social and governance efforts and addressed shareholder questions.
Copies of Mr. Gifford’s prepared remarks and business presentation and a replay of the audio webcast of the Annual Meeting are available on altria.com and via the Altria Investor app.
Final voting results will be reported in a current report on Form 8-K filed with the U.S. Securities and Exchange Commission.
Black Buffalo, a company that makes and sells smokeless tobacco alternative products, has raised $9.75 million in growth capital. Investors included prominent financial companies such as Pendyne Capital, Watchfire Ventures and Open Pantry Food Marts. Black Buffalo plans to use this capital to expand its marketing presence, upgrade its manufacturing capacity, increase its online distribution and launch into convenience stores and physical retail outlets throughout the United States.
With proceeds from this capital raise, Black Buffalo has assembled premarket tobacco product applications for its entire product portfolio, which the company intends to submit to the U.S. Food and Drug Administration’s Center for Tobacco Products in the coming months. Additionally, Black Buffalo has purchased and expects a second quarter 2020 delivery of a high-throughput pouch maker from one of the world’s leading industrial manufacturers.
Despite the uncertainty created by the coronavirus crisis, CEO Andre Calantzopoulos expressed confidence in the midterm outlook for Philip Morris International (PMI) during the company’s 2020 annual meeting of shareholders.
“Our main focus at this time is on the health and well-being of our employees, their families and the communities in which we operate,” said Calantzopoulos.
“The strong, underlying performance of our business, especially the impressive growth of reduced-risk products, was evident in our full-year 2019 and first-quarter 2020 results. However, there is considerable uncertainty as to the development and duration of the Covid-19 pandemic and its economic and social consequences, including those which impact our operating environment and our consumers.
“We remain confident in our structural midterm growth prospects and, when the current headwinds have passed, expect to resume growth consistent with our 2019 to 2021 currency neutral compound annual growth targets. Crucially, our organization, liquidity and balance sheet are strong. We will continue to protect and support our employees, serve our consumers and reward our shareholders, which includes our strong commitment to our dividend.”
This year’s shareholders meeting was held in virtual format only.
An archived copy of the webcast will be available for approximately one year from the date of the meeting. Presentation slides and script will also be available.
