Category: Financial

  • 22nd Ups Performance on Lower Cost

    22nd Ups Performance on Lower Cost

    Photo: 22nd Century Group

    22nd Century Group reported an operating loss of $4.4 million for the first quarter of 2024 compared with $10.4 million in the comparable period of the previous year. Net loss from continuing operations for the first quarter of 2024 decreased to $5.5 million compared with $10.8 million in the prior-year comparative period.

    Adjusted earnings before interest, taxes, depreciation and amortization declined to a loss of $3.5 million from a loss of $9 million in the prior-year comparative period.

    Net revenue from continuing operations was $6.5 million, as the company further refined its revenue mix away from negative margin filtered cigars in favor of higher margin VLN and conventional cigarettes.

    “The first quarter and subsequent events in Q2 2024 demonstrate that we are rapidly transforming 22nd Century’s operating results as we shift our revenue mix and implement a lean operating cost mantra across the company, and strengthening the balance sheet,” said 22nd Century Group chairman and CEO Larry Firestone in a statement.

    “Operating costs declined dramatically, to just $3.3 million, well below our target of $4 million. We also recently announced two significant new customer contracts to drive additional revenue and improve our margin profile, including a 20 percent increase in our CMO production unit volumes. Those contracts commenced in April 2024 with revenue ramping in the second quarter.”

  • Imperial: Strongest Growth in Decade

    Imperial: Strongest Growth in Decade

    Photo: Casimirokt | Dreamstime.com

    Price hikes and growing demand for cigarette alternatives boosted Imperial Brands’ half-year results.

    Adjusted operating profit for the six months that ended March 31 increased 2.8 percent in constant currency to £1.67 billion. Adjusted tobacco and next-generation product (NGP) revenue was £3.64 billion, also up 2.8 percent over the comparable 2023 period.

    Sales of Imperial’s NGP brands, which include Pulze heated tobacco and Blu e-cigarettes, grew by 16.8 percent.

    After years of slow growth and market share losses, Imperial outlined a turnaround plan in 2021 focusing on its five top markets and beefing up investments in NGPs, which are deemed less harmful to health. That strategy is paying off, according to Imperial Brands CEO Stefan Bomhard.

    “Investment in consumer capabilities, more agile ways of working and further progress with our performance culture have made Imperial Brands a stronger business better able to deliver an acceleration in financial delivery,” said Bomhard in a statement. “This is demonstrated in the first half with the strongest organic top-line growth in more than 10 years, amid a challenging external environment.

    “In tobacco, stronger brands and improved sales execution have enabled us both to consolidate the market share gains in our priority markets achieved in recent years and to deliver a strong price mix of 8.6 percent.

    “In next generation products, we are steadily building scale within our footprint and these efforts have resulted in net revenue growth of 16.8 percent on a constant currency basis. In the past six months, we have launched new products in all categories, including our entry into the U.S. oral nicotine market with the new Zone brand. Our improved innovation capabilities, which now include three ‘Sense Hubs’ in Liverpool, Hamburg and Shenzhen, mean we are well set up to adapt to changing consumer preferences and regulatory requirements.

    “Pricing actions in tobacco taken in the first half and good momentum in NGP gives us confidence in our ability to deliver full-year results in line with our guidance.”

    The company said its turnaround plan would result in further improvement to adjusted operating profit growth, supporting mid-single-digit percentage constant currency compound annual growth rate over the final two fiscal years of the plan.

  • 22nd Century Eliminates $2.3 million of Debt

    22nd Century Eliminates $2.3 million of Debt

    22nd Century Group has entered into a binding letter of agreement to eliminate an additional $2.3 million in outstanding debt with JGB Capital.

    Under the terms of the agreement, the company and JGB Capital will exchange an aggregate of $2.3 million in principal, fees and expenses owed to JGB Capital for consideration of approximately 1.375 million shares of the company’s common stock and prefunded warrants. Additionally, the company will defer monthly amortization payments for an additional two months, resulting in no required further principal repayment until August 2024.

    “This agreement with JGB is another significant step in restoring strength to our balance sheet as we work toward becoming debt-free,” said 22nd Century Group chairman and CEO Larry Firestone in a statement.

    “This transaction also preserves our cash resources for commercial use as we work to become cash flow positive by the first quarter of 2025. We have made substantial progress on our commercial programs, including refining our revenue mix, implementing a lean operating cost profile and positioning the company to win new contracts, including the new CMO and distribution agreements announced recently, which are already advancing our sales in the second quarter.”

  • Revenue and Profits up at Japan Tobacco

    Revenue and Profits up at Japan Tobacco

    Photo: JTI

    Japan Tobacco’s revenue increased by 11.3 percent to ¥740.3 billion ($4.75 billion), year-on-year, in the first quarter of 2024. Core revenue at constant currency exchange rates rose by 5.7 percent to ¥676.7 billion while adjusted operating profit at constant exchange rates increased by 3.4 percent to ¥231 billion.

    On a reported basis, adjusted operating profit increased by 1.5 percent to ¥226.7 billion. Operating profit increased by 4.6 percent to ¥215.8 billion, and profit increased by 8.7 percent to ¥157.3 billion.

    “The JT Group delivered robust results in the first quarter,” said President and CEO Masamichi Terabatake in a statement. “GFB [global flagship brands] volume growth and solid pricing, as well as RRP [reduced-risk product]-related revenue increasing by double-digits in the tobacco business, continued to drive the strong performance of the group.”

    “RRP volume increased by 25.2 percent year-on-year, mainly driven by the HTS [heated-tobacco sticks] segment, which is our investment priority. Geo-expansion of Ploom X is on track; we have completed launches in four additional markets year-to-date. With plans to launch in four more markets by June, we are making good progress to deliver our ambitions set for 2028.”

  • PMI Holds Annual Shareholders Meeting

    PMI Holds Annual Shareholders Meeting

    Photo: PMI

    Philip Morris International held its 2024 annual meeting of shareholders on May 8. Andre Calantzopoulos, executive chairman of the board, addressed shareholders and answered questions. CEO Jacek Olczak gave a business presentation commenting on PMI’s 2023 performance and progress in its transformation to a smoke-free business.

    “Our strategy to become a smoke-free company has enabled us to build and sustain strong momentum, resulting in smoke-free products reaching nearly 40 percent of our total net revenues and over 40 percent of our gross profit in the fourth quarter of 2023,” said Olczak in a statement.

    “As a global smoke-free champion with leading brands IQOS and Zyn, we are well positioned to further accelerate our transformation in the years to come, to the benefit of the company, our shareholders, other stakeholders and public health.”

    Approximately 80 percent of the shares entitled to vote were represented at the meeting in person or by proxy. The shareholders elected 12 nominees for director; approved, on an advisory basis, the compensation of named executive officers; and ratified the selection of PricewaterhouseCoopers as independent auditors.

    An archived copy of the webcast of the meeting is available at www.virtualshareholdermeeting.com/PM2024.

  • KT&G Reports Robust Overseas Performance

    KT&G Reports Robust Overseas Performance

    Photo: KT&G

    KT&G Corp. reported consolidated revenue of KRW1.29 trillion ($942.27 million) and operating profit of KRW236.6 billion for the first quarter ended March 31, 2024.

    The South Korean cigarette manufacturer’s overseas and domestic next-generation product (NGP) and overseas cigarette sectors sustained robust performances in the quarter, extending their trend from the previous year.

    Overseas NGP stick volume grew by 14.7 percent, reaching 2.11 billion sticks.

    KT&G also achieved its third consecutive quarters of revenue growth in the overseas cigarette business, driven by strategic pricing in core growth markets such as Indonesia. KT&G’s first-quarter overseas cigarette revenue recorded KRW291.8 billion, up 10.1 percent from the comparable 2023 quarter.

    While the company delivered notable results in core business areas, its consolidated revenue and operating profit for the first quarter decreased compared to the same period last year. This downturn was mainly driven by rising manufacturing costs, the completion of large-scale real estate development projects and reduced revenue from the health functional food sector amid lower consumer spending.

    “KT&G is committed to strengthening its competitiveness in core business areas and driving a business transformation aimed at making a significant leap forward to become a ‘global top-tier company,’” KT&G wrote in a press release.

    “Despite a number of headwinds, such as inflation-driven manufacturing cost pressure and economic recession, KT&G is striving to achieve a business turnaround in the second half of the year by strengthening global competitiveness and pursuing operational efficiency optimization.”

  • Tobacco Boosts Murphy USA’s First Quarter Results

    Tobacco Boosts Murphy USA’s First Quarter Results

    Credit: Refrina

    Murphy USA’s Q1 2024 results were below expectations due to various headwinds, but President and CEO Andrew Clyde highlighted the positive performance in tobacco and fuel during Thursday’s earnings call.

    The convenience store chain’s net income and adjusted EBITDA for the first quarter of 2024 were lower compared to the same quarter of the previous year.

    Murphy’s net income for the first quarter of 2024 was $66 million, which is a decrease from $106.3 million for the same quarter in the previous year, according to media reports.

    Clyde said on the call that unique factors that distinguished the first quarter of 2024 from the same quarter the year before included product prices being up 50 cents compared to 8 cents in the prior year and an increase in severe weather events.

    Severe weather, especially on the Atlantic coast, drove customers to trade down for value and stock up on tobacco and fuel.

  • Sales Dip at Scandinavian Tobacco

    Sales Dip at Scandinavian Tobacco

    Photo: STG

    Scandinavian Tobacco Group reported net sales of DKK1.95 billion ($281.97 million) for the first quarter of 2024, down 1 percent from the comparable 2023 period. Organically, net sales decreased 2 percent.

    Organic net sales growth in the company’s handmade cigars and next-generation oral product categories was offset by decline in machine-rolled cigars and smoking tobacco. The EBITDA margin was impacted by declining volumes in a seasonally small quarter, mix changes and investments in growth, according to the company.

    The group expects to deliver organic net sales growth and a material improvement in the EBITDA-margin in the second quarter, and maintains its full-year guidance.

    “Despite a slow start to the year and the first quarter profitability being impacted by mix, cost inflation and investments in growth, we maintain our expectations for the full year,” said CEO Niels Frederiksen in a statement.

    “Entering the second quarter, we expect the net sales development to improve and we expect to see a more normalized mix, which will impact profitability and cash-flows positively. In the quarter we have continued to execute our strategy with the opening of three Macanudo concepts stores and investments in our growth initiatives. Our growth enablers constituted around 11 percent of net sales in the quarter.”

  • Sales Down, Profit up at Turning Point Brands

    Sales Down, Profit up at Turning Point Brands

    Turning Point Brands announced financial results for the first quarter ended March 31, 2024.

    For the first quarter of 2024, total consolidated net sales decreased 3.9 percent to $97.1 million compared to the first quarter of 2023.

    Zig-Zag products net sales increased by 11.5 percent compared to the previous year. Stoker’s products net sales increased by 8 percent compared to 2023.

    Creative Distribution Solutions net sales decreased by 44.9 percent compared to the same period the previous year.

    Gross profit increased 6.8 percent to $51.9 million compared to the previous year period. Net income increased 58.1 percent to $12 million. Adjusted net income increased 29.8 percent to $15.4 million. Adjusted EBITDA increased 21.6 percent to $25.3 million.

     “We are encouraged by our first-quarter results,” said President and CEO Graham Purdy in a statement “We believe the execution of our strategy has Zig-Zag back on a sustainable growth trajectory; Stoker’s continued to grow and improved its market share; and the national launch of our FRE Modern Oral product is off to a good start.”

    “We were encouraged by the outsized performance of the alternative channel in the quarter,” said Purdy. “Our ongoing efforts continue to demonstrate progress toward sustainably growing the Zig-Zag brand.”

    The company is maintaining its previous expectation of full-year 2024 adjusted EBITDA of $95 million to $100 million.

  • Vector Reports Results

    Vector Reports Results

    Photo: tippapatt I

    Vector Group has reported its first-quarter 2024 results, noting that it has had continued strong earnings growth in the tobacco segment.

    In the first quarter, consolidated revenues were $324.6 million, down 2.9 percent compared to the prior-year period. Tobacco segment revenues were $324.6 million, down 2.9 percent compared to the prior year.

    Tobacco segment wholesale market share declined to 5.6 percent from 5.7 percent in the prior-year period, and retail market share remained at 5.8 percent, unchanged from the prior-year period.

    Montego wholesale market share increased to 3.9 percent from 3.3 percent in the prior-year period, and retail market share increased to 4 percent from 3.4 percent in the prior-year period.

    Reported operating income was $77.8 million, up 4.7 percent, or $3.5 million, compared to the prior-year period.

    Tobacco segment operating income was $83 million, up 5.6 percent, or $4.4 million, compared to the prior-year period, primarily attributable to the continued transition of the Montego brand strategy from volume-based to income-based.

    Adjusted EBITDA was $82.8 million, up 6 percent, or $4.7 million, compared to the prior year. Tobacco adjusted EBITDA was $84.4 million, up 5.5 percent, or $4.4 million, compared to the previous year.

    “Vector Group delivered strong performance in the first quarter, driven by continued growth of our Montego brand,” said Howard M. Lorber, president and CEO of Vector Group, in a statement. “Our proven ability to increase Montego’s market share and profitability underscores the effectiveness of our brand strategy, market analysis, broad-based distribution and excellent retail execution. We remain confident in our ability to continue driving sustainable growth and creating long-term value for our stockholders.”