Category: Financial

  • Universal to webcast results

    Universal to webcast results

    Universal Corporation is due to webcast a results conference call from 17.00 Eastern Time on August 3 following the release of its results for the first quarter of fiscal year 2018 after market close on that date.

    The conference call will be hosted by Candace C. Formacek, vice president and treasurer.

    It will be available on a listen-only basis at www.universalcorp.com.

    A replay of the webcast will be available at that site until November 3.

    In addition, a taped replay of the call will be available from 20.30 on August 3 through August 16 at (855) 859-2056, using the telephone replay identification number 59259116.

  • PMI’s volume down sharply

    PMI’s volume down sharply

    Philip Morris International’s cigarette shipment volume during the second quarter to the end of June, at 193,540 million, was down by 7.5 per cent on that of the second quarter of 2016, 209,289 million.

    Volume increased by 1.4 percent to 21,553 million in its Latin America and Canada region, but it fell in each of its other three regions: by 1.3 percent to 49,758 million in the EU; by 5.7 percent to 64,414 in its Eastern Europe and Middle East (EEMA) region; and by 16.6 percent to 57,815 million in its Asia region.

    Cigarette shipments of Marlboro were down by 1.8 percent to 68,830 million, while those of L&M where down by 4.8 percent to 23,369 million. Cigarette shipments of Chesterfield rose by 17.7 percent to 13,652 million; those of Parliament fell by 6.2 percent to 11,169 million; those of Bond Street fell by 9.5 percent to 10,278 million; those of Philip Morris increased by 42.4 percent to 12,688 million; and those of Lark fell by 24.5 percent to 5,688 million.

    The 2017 second-quarter declines were offset to some extent by an increase in sales of heated tobacco units from 1,157 million during the second quarter of 2016 to 6,350 during the second quarter of 2017. Sales of heated tobacco units were increased in all regions: in the EU from 31 million to 392 million; in the EEMA from eight million to 229 million; in the Asia region from 1,118 million to 5,726 million; and in the Latin America and Canada region from zero to three million.

    Taken together, cigarette and heated tobacco unit volume during the second quarter, at 199,890 million, was down by 5.0 percent on that of the second quarter of 2016, 210,446 million.

    PMI reported that its total shipment volume of cigarettes and heated tobacco units during the six months to the end of June, at 377,877 million, was down by 7.1 percent on that of the six months to the end of June 2016, 406,940 million. The decline, excluding net estimated inventory movements, was put at 6.3 percent. It was said to have been principally due to the company’s performance in Asia, notably in Indonesia, but also in Pakistan and the Philippines, reflecting ongoing declines of primarily low-margin cigarette volumes; and due to its performance in the EEMA.

    Meanwhile, PMI’s cigarette volume during the six months to the end of June, at 367,092 million, was down by 9.4 percent on that of the six months to the end of June 2016, 405,330 million. This fall was said to have been due to: its performance in the EU, principally in Italy and Spain, partly offset by that in Poland; in the EEMA region, reflecting declines across the region, notably in Russia and Ukraine; in the Asia region, principally in Indonesia, Japan, Pakistan and the Philippines; and in the Latin America & Canada region, principally in Argentina, Brazil and Canada.  However, the decline in cigarette shipment volume was partly offset by a higher heated tobacco unit shipment volume up from 1.6 billion units during the first six months of 2016 to 10.8 billion units during the first six month of this year, driven by its performance in Japan.

    Reported diluted earnings per share during the second quarter, at $1.14, were down by 0.9 percent on those of the second quarter of 2016, $1.15, while adjusted dilute earnings per share, at $1.14, were down by 0.9 percent.

    Reported net revenues were up by 1.5 percent to $19.3 billion while net revenues, excluding excise taxes, of $6.9 billion, were up by 4.0 percent.

    “Our quarterly results were robust with, as expected, sequential improvement in our volume performance, as well as strong currency-neutral net revenue growth of seven percent versus last year,” said CEO André Calantzopoulos.

    “IQOS, our flagship smoke-free alternative, continues to perform exceptionally well, supported by further recent successful market launches, notably in Korea. In the quarter, shipments of Marlboro HeatSticks represented over 40 percent of our total shipments in Japan, where we recorded a national share of 10 percent.

    “To date, more than 2.9 million adult consumers have already stopped smoking and switched to IQOS.”

  • Tax deal edges closer

    Tax deal edges closer

    The government of the Philippines has said that it will accept an initial payment of about P3.5 billion toward the tax liabilities of local cigarette maker Mighty Corp, according to a story in The Manila Times.

    The Times story indicated, however, that the Department of Finance (DOF) had ‘stressed’ that such acceptance did not yet mean it was agreeing to the company’s total settlement offer of P25 billion.

    “We will accept the initial payment,” Finance Secretary Carlos Dominguez III said in a statement released on Thursday.

    The Finance department said it had been informed that a check for P3.44 billion would be issued by JT International Philippines (JTI).

    Last week JTI confirmed it was in talks with Mighty on the sale of the local cigarette maker’s manufacturing and distribution business and assets to Japan Tobacco.

    Mighty had earlier said that its tax settlement offer would be funded by means of an ‘interim loan’ from JTI and the sale by Mighty and its affiliates of its manufacturing and distribution business and assets, along with the intellectual property rights associated with these assets, ‘including those owned by the company, Wong Chu King Holdings Inc, and other affiliates, to JTI or any of its affiliates for a total purchase price of P45 billion exclusive of VAT’.

    The Finance department said Mighty would pay the balance of P21.5 billion on or after the closing of its proposed deal with JTI.

    Meanwhile, Dominguez said that even if the government accepted Mighty’s settlement offer, this would not preclude any criminal charges that the Bureau of Internal Revenue might file against the company in connection with its tax-related issues.

  • Illegal trade exposed

    Illegal trade exposed

    Philip Morris International has told the US Commission on Security and Co-operation that it has a ‘clear business imperative to combat the problem of the illegal tobacco trade’ and to ensure its products are sold legally in the market for which they are intended.

    According to a note posted on PMI’s website, Marc Firestone, the company’s senior vice president and general counsel yesterday appeared as an invited witness before the commission to offer expert testimony in support of the commission’s objective of addressing the security and economic threats posed by the illegal trade in tobacco.

    The commission is a bipartisan body of the US Congress with representation from the House of Representatives and Senate.

    Firestone is said to have told the commission that the global illegal tobacco trade annually deprived governments of US$40-50 billion in lost tax revenue, a figure greater than that of the illegal trade in oil, wildlife, timber, arts and antiquities, and conflict minerals combined. He added that “criminals are the only promoters of the global illegal tobacco trade”.

    “The revenues that governments and law-abiding manufacturers like PMI lose every year to the illicit trade in tobacco are huge,” Firestone said. “However, the threat posed to safety, security, and the rule of law in Europe, the United States and around the globe is where the interests of our company and the concerns of this commission most pointedly intersect.”

    Firestone was said to have emphasized the critical role co-operation between industry, law enforcement, and government authorities could play in tackling illicit tobacco, and outlined a series of concrete measures that these groups could take to further reduce the flow of illicit tobacco worldwide.

    With Firestone on the expert panel were Dr. Louise Shelley, founder and executive director of the Terrorism, Transnational Crime and Corruption Center at George Mason University, and Professor David Sweanor, an adjunct professor at the University of Ottawa and global tobacco control policy expert.

    Firestone’s testimony is at: https://www.pmi.com/docs/default-source/pmi_media-center/pmi-testimony_final_17-july-2017.pdf.

  • Illegal trade increasing

    Illegal trade increasing

    A recent study conducted by the Foundation for Economic and Industrial Research in Greece, estimates that illicit products could account for 30 percent of cigarette sales this year, according to a Kathimerini story relayed by the TMA.

    In January-June this year, the decrease in the legal cigarette market was twice that of the corresponding period last year.

    The story said that high taxes on tobacco products and a lack of remedial measures were considered as factors for the reported increase in the illegal cigarette trade.

  • JT’s June sales decimated

    JT’s June sales decimated

    Japan Tobacco Inc.’s domestic cigarette sales volume during June, at 8.0 billion, was down by 10.1 percent on that of June 2016, 8.8 billion, according to preliminary figures issued by the company today. The June 2016 figure was down by 4.6 percent on that of June 2015.

    Volume during January-June, at 46.8 billion, was down by 11.2 percent on that of January-June 2016, 52.7 billion. The January-June 2016 volume was down by 0.7 percent on that of January-June 2015.

    JT’s market share stood at 61.3 percent during June, at 61.0 percent during January-June, and at 61.1 percent during January-December 2016.

    JT’s domestic cigarette revenue during June, at ¥47.5 billion, was down by 9.7 percent on its June 2016 revenue, ¥52.6 billion, which was up by 0.2 percent on its revenue of June 2015.

    Revenue during January-June, at ¥278.7 billion, was down by 9.0 percent on that of January-June 2016, ¥306.2 billion, which was increased by 1.8 percent on its revenue of January-June 2015.

  • Results webcasts scheduled

    Results webcasts scheduled

    Philip Morris International is scheduled to host a live audio webcast at www.pmi.com/2017Q2earnings from 09.00 Eastern Time on July 20 to discuss its 2017 second-quarter results, which will be issued about 07.00 the same day.

    During the webcast, which will be in listen-only mode, CFO Jacek Olczak will discuss PMI’s results and answer questions from the investment community and news media.

    The audio webcast can be accessed also on iOS or Android devices by downloading PMI’s free Investor Relations Mobile Application at www.pmi.com/irapp.

    An archived copy of the webcast will be available until 17.00 on August 18 at www.pmi.com/2017Q2earnings.

    Slides and script will be available at www.pmi.com/2017Q2earnings.

     

    Meanwhile, the Altria Group is due to host a live audio webcast from 09.00 Eastern Time on July 27 to discuss its 2017 second-quarter and first-half business results. A press release containing the company’s business results will be issued about 07.00 the same day.

    The webcast can be accessed at altria.com or through the Altria Investor App.

    During the webcast, which will be in listen-only mode, chairman, CEO and president, Marty Barrington, and CFO, Billy Gifford, will discuss the Company’s 2017 results and answer questions from the investment community and news media.

    Directions for the required pre-event registration are at www.altria.com/webcasts.

    An archived copy of the webcast will be available on altria.com or through the Altria Investor App. The free app is available for download at www.altria.com/irapp or through the Apple App Store or Google Play.

  • Tobacco hospitals opposed

    Tobacco hospitals opposed

    A recent move by the Karnataka health and family welfare department exploring the possibility of its entering a partnership with a tobacco company to build speciality government hospitals has sparked opposition among public health activists, according to a story in The Times of India.

    In an e-mail dated April 18, Shalini Rajneesh, the principal secretary of the department, wrote to Anil Rajput, senior vice president, corporate affairs, at ITC, outlining the government of Karnataka’s plan to build five ‘super speciality hospitals’ and the opportunity for private companies to partner the government in this initiative.

    ‘As discussed, we are planning to set up five super speciality hospitals in five districts of Karnataka,’ the e-mail was reported to have said.

    ‘We plan to build the hospital and invite PPP partners to come with doctors and equipment to run the hospital.

    ‘The government will pay for the patients as per package costs pre-decided with a group of doctors both from the government and the private sector…

    ‘May I request you to put up this proposal before the ITC board, as early as possible?’

    Public health activists have termed the move a clear case of a conflict of interests.

    In opposing the initiative, one unnamed activist was said to have quoted Article 5.3 of the World Health Organization’s Framework Convention on Tobacco Control.

    Meanwhile, anti-corruption activist Ravi Krishna Reddy said such partnerships allowed the tobacco industry to make inroads into the health sector and influence government decisions.

    “The Karnataka government itself, recognizing WHO guidelines, issued a circular in the past that government and elected officers shall not participate in tobacco industry related events,” he said.

    “The recent move by the Karnataka health department to partner a tobacco firm now is a breach of public trust and a case of conflict of interest – as the tobacco firm gains close access to decision making authorities dealing with tobacco control.”

    Asked about the move, Rajneesh said no decision had been taken by the government to partner with ITC to build government hospitals.

    “Following a cabinet decision to build five super speciality hospitals in five districts, we are exploring various financial models to implement the project, and PPP is one of them,” she said.

  • Research under-appreciated

    Research under-appreciated

    Dahlia Garwe

    Zimbabwe’s government is failing to fund the country’s Tobacco Research Board (TRB) despite its being a key institution in the effort to turn around the fortunes of the country’s economy, according to a story in The News Day.

    TRB general manager Dahlia Garwe last week told the Parliamentary Portfolio Committee on Agriculture, which was on tour, that 75 percent of the capital used to run the research institute came from their own commercial activities, mostly from seed production at Kutsaga.

    “As a parastatal, we are supposed to get funding from the government, but we have not received anything and TRB has been self-supporting,” Garwe said.

    “Government collects an 0.078 percent tobacco levy and it is shared by the Tobacco Industry and Marketing Board (TIMB) and TRB, as well as other interested bodies, which contributes to about 30 percent to 35 percent of our revenue, while the 65 percent to 75 percent shortfall is borne by ourselves.”

    Despite this lack of government support, the TRB had managed to produce tobacco seed varieties for the local and export market, and Kutsaga was said to be a very reputable seed research institute internationally.

    Garwe said the TRB exported annually one and a half tons of Burley seed and 100 kg of flue-cured seed.

    And the TRB currently has about 1,200 ha of seedlings that have been booked by farmers for planting in September. The seedlings are sold for $398 per ha.

    The TRB management said it was facing challenges over raw materials that had to be ordered from outside Zimbabwe because, at times, it took six months for them to be delivered.

    And it was facing problems because it needed to replace the equipment used in its laboratories. Some of this equipment had been used since the 1950s and when it broke down, it was difficult to get replacements because developed countries were now using modern equipment.

    Garwe said other challenges included those associated with land, as well as those associated with illegal settlers, some of whom had invaded TRB space and were vandalizing fences and materials such as plastics used for growing tobacco seeds.

  • Jobs targeted at Reynolds

    Jobs targeted at Reynolds

    R.J. Reynolds Tobacco confirmed on Tuesday it was offering voluntary retirement to production workers ahead of the pending sale of its parent company, Reynolds American Inc. to British American Tobacco, according to a story by Richard Craver for the Winston-Salem Journal.

    “We manage our businesses for maximum flexibility, and several factors led us to believe this was a good time to offer some production associates an opportunity to retire with severance benefits,” Reynolds spokesman David Howard was quoted as saying.

    “This is on a voluntary basis – we do not plan any involuntary job eliminations regardless of how many employees sign up.”

    Reynolds is estimated to have between 2,000 and 2,200 local employees, the majority of whom work at its Tobaccoville plant, but the company has refused to provide a local workforce count in recent years.

    Reynolds had 5,500 full-time and 50 part-time employees as of December 31, according to its 2016 annual regulatory report. The total includes 3,700 Reynolds Tobacco, 500 Santa Fe Natural Tobacco and 600 American Snuff employees.

    The bulk of the remaining Reynolds Tobacco employees are sales and marketing representatives out in the field serving retail, wholesale and distribution customers, as well as about half of Santa Fe’s workforce.

    BAT said in a January 18 regulatory filing that it “has no plans to close or move the head office in Winston-Salem, nor make any significant changes to the current high-quality manufacturing facilities in North Carolina and Tennessee, nor to the trade marketing team”.

    But Nicandro Durante, BAT’s chief executive, said in a letter to BAT shareholders that the company projected $400 million in cost savings by July 2020. Such a saving would mean eliminating duplicate corporate functions, greater supply chain economies of scale and enhanced manufacturing efficiency from Reynolds’ two-million-square-foot Tobaccoville plant.

    Craver’s piece is at: http://www.journalnow.com/business/business_news/local/reynolds-offers-voluntary-retirement-packages-to-select-production-workers/article_558dab5c-6df6-5429-afe7-607be539fbb2.html