Category: Financial

  • BAT volumes up in 2016

    BAT volumes up in 2016

    British American Tobacco’s cigarette volumes during the 12 months to the end of December, at 665 billion, were increased by about 0.2 percent on those of the 12 months to the end of December 2015, 663 billion. On an organic basis volumes fell by 0.8 percent, a figure set against what the company estimated was an industry-wide decline of about three percent.

    Global Drive Brand (GDB) volume grew by 7.5 percent and they now account for 49 percent of group cigarette volume, up from 32 percent in 2011.

    The company’s cigarette volumes were increased in its EEMEA (Eastern Europe, Middle East and Africa) region from 229 billion to 236 billion, and in its Western Europe region from 112 billion to 120 billion; but they were down in its Americas region from 124 billion to 113 billion, and in its Asia-Pacific region from 198 billion to 196 billion.

    Volume growth in Bangladesh, Ukraine, Russia, Vietnam, Turkey, Mexico, Poland and Indonesia was offset by declines in Pakistan, Brazil, Venezuela and Malaysia.

    In presenting today its preliminary results for 2016, BAT reported that the group had increased its market share by more than 0.5 of a percentage point, driven by the performance of its GDBs whose combined share was up by 1.0 percentage point.

    Dunhill’s overall market share was flat. The brand’s volume fell by 3.3 percent, driven mainly by industry declines in Malaysia and Brazil, more than offsetting growth in South Korea, Romania and continued growth in Indonesia.

    Kent volume increased by 1.0 percent, and its market share was up by 0.1 of a percentage point, driven by the brand’s performance in Chile, Turkey and Japan.

    Lucky Strike grew its market share by 0.1 of a percentage point, while the brand’s volume was up by 13.5 percent, with growth in Indonesia, Colombia Egypt, France, Germany and Croatia more than offsetting lower volume in Argentina and Russia.

    Pall Mall’s market share grew by 0.1 of a percentage point, with volume marginally higher as growth in Venezuela, Poland, Mexico and Romania more than offset reductions in Pakistan and the migration to Rothmans in Italy.

    Rothmans’ 36.9 percent volume growth and its market share increase of 0.7 of a percentage point was driven by the brand’s performance in Russia, Ukraine, Italy, Nigeria, Turkey and South Korea.

    The volume of the company’s other international brands declined by 9.0 percent as growth in State Express 555 and Craven A (in Vietnam) was more than offset by lower volume from Peter Stuyvesant (in South Africa), JPGL (largely in SE Asia), and Vogue (where growth in Russia was offset by lower volume in South Korea due to the migration to Rothmans).

    Innovations volume grew by 12 percent, driven by the success of tube filters, capsules and the slimmer formats across the GDB portfolio; and they now account for 29 percent of the company’s cigarette volume.

    BAT’s tobacco volumes during 2016, at 689 billion were unchanged from those of 2015. Tobacco volumes include, as well as cigarettes, other tobacco products whose volumes are stated in cigarette stick equivalents.

    BAT’s revenue, at £14,751 million, was increased by 12.6 percent on that of 2015, £13,104 million.

    Adjusted profit from operations was up by 9.8 percent to £5,480 million.

    Profit from operations was down by 2.9 percent to £4,655 million.

    Adjusted diluted earnings per share were up by 10.4 percent to 247.5p, while basic earnings per share were increased by 8.4 percent to 250.2p.

    Dividends per share were up by 10.0 percent to 169.4p.

    “The Group delivered a great set of results in 2016, with excellent growth seen across all key business metrics,” said chief executive Nicandro Durante.

    “This was achieved despite a challenging backdrop of adverse foreign exchange rates impacting our cost base and ongoing pressure on consumers’ disposable income in many of our key markets.”

  • Tobacco profits being eyed

    old people photoSmoking is costing the England’s local authorities £760 million a year in social care, according to a Press Association report published in The Guardian and citing a new report.

    The report urges the government to force tobacco companies to ‘make a greater contribution to mitigating that harm’.

    The all-party parliamentary group on smoking and health says that local authorities in England are struggling to fund stop-smoking services because of financial cuts by central government.

    The study, which includes Action on Smoking and Health data, said tobacco manufacturers should make a greater contribution to mitigating the harm caused by their products.

    It said the four major tobacco manufacturers remained among the most profitable companies on earth, so they could afford to make this contribution.

    The Press Association report said that the cost of smoking in England was thought to be at least £12.9 billion, including lost productivity costs and paying for National Health Service and social care.

    But Simon Clark, the director of the smokers’ group Forest, was quoted as describing the suggestion that smoking was contributing to the social care crisis as nonsense.

    “Smoking rates are at their lowest ever level, yet smokers still contribute £12 billion a year in tobacco taxation, a sum that far exceeds the alleged cost of treating smoking-related diseases or providing social care,” he said.

  • Universal results webcast

    Universal results webcast

    Universal Corporation is due to webcast a conference call at www.universalcorp.com from 17.00 Eastern Time on February 7 following the release of its results for the third quarter of fiscal year 2017 after market close on that date.

    The conference call, which will be in listen-only mode, will be hosted by Candace C. Formacek, vice president and treasurer.

    A replay of the webcast will be available at www.universalcorp.com until May 6.

    And a taped replay of the call will be available from 20.30 on February 7 through February 21 at (855) 859-2056, telephone replay identification number 63971570.

  • Acquisition spoils to winner

    Acquisition spoils to winner

    When one corporation buys another, the headquarters spoils tends to go to the buyer, according to a story by Richard Craver for the Winston-Salem Journal that touched upon the sale of Lorillard Inc. and the proposed sale of Reynolds American Inc.

    With the loss of each headquarters, well-paying jobs went to the acquiring company and there was typically a siphoning and redirection of community support funds.

    Greensboro had experienced two body blows, one of which had occurred when ‘the main assets of Lorillard Inc. were sold in June 2015 to ITG Brands LLC, the US subsidiary of Imperial Brands Plc, in a four-party deal involving Reynolds American Inc, Craver wrote.

    When it came to British American Tobacco’s likely $49.4 billion purchase of Reynolds, civic and elected officials were said to have their fingers crossed that philanthropic contributions would remain unaltered as much as possible.

    Reynolds spokesman Bryan Hatchel said philanthropy was a big part of Reynolds’ legacy, going back to the founder Richard Joshua Reynolds. “He started a legacy of philanthropy that reached into this community of Winston-Salem, and we continue that effort today,” Hatchell said. “Part of our transforming tobacco strategy includes transforming communities in which our employees live and work.”

    Winston Salem’s mayor Allen Joines has said part of his confidence of a business-as-usual mindset from BAT is the fact it had been embedded in the Reynolds cultures since acquiring its 42.2 percent ownership stake in July 2004.

  • PMI to webcast results

    PMI to webcast results

    Philip Morris International is scheduled to host a live audio webcast at www.pmi.com/webcasts from 09.00 Eastern Time on February 2 to discuss its 2016 fourth-quarter and full-year results, which will be issued about 07.00 the same day.

    During the webcast, which will be in listen-only mode, CEO André Calantzopoulos (pictured) will discuss the company’s results and its outlook for 2017, and, with CFO Jacek Olczak, 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 March 3 at www.pmi.com/webcasts.

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

  • Sales bounce back

    cigarettes in South Korea photo
    Photo by InSapphoWeTrust

    Cigarette sales, which tumbled in South Korea in the wake of a huge tax-induced price increase at the start of 2015, rebounded sharply last year, according to a story in The Korea Economic Daily.

    The Daily reported Nielsen Korea as saying on January 22 that about 72.9 billion cigarettes had been sold in Korea last year, up 9.3 percent from the 66.7 billion sold in 2015.

    In 2014, the year before the 80 percent price increase, cigarette sales reached 85.3 billion, about 17 percent higher than the 2016 figure.

    The 2014 figure was inflated by speculative buying ahead of the hike in cigarette prices in January 2015.

  • JT’s domestic volume down

    JT’s domestic volume down

    Japan Tobacco Inc.’s domestic cigarette sales volume during December, at 9.6 billion, was down by 3.6 percent on that of December 2015, 9.9 billion, according to preliminary figures issued by the company today. The December 2015 figure was down by 2.1 percent on that of December 2014.

    Volume during January-December, at 106.2 billion, was down by 2.8 percent on that of January-December 2015, 109.2 billion. The January-December 2015 volume was down by 2.8 percent on that of January-December 2014.

    JT’s market share stood at 62.2 percent during December, at 61.1 percent during January-December, and at 59.9 percent during January-December 2015.

    JT’s domestic cigarette revenue during December, at ¥57.0 billion, was increased by 1.8 percent on its December 2015 revenue, ¥55.9 billion, which was down by 3.1 percent on its revenue of December 2014.

    Revenue during January-December, at ¥623.8 billion, was increased by 0.9 percent on that of January-December 2015, ¥618.5 billion, which was down by 2.0 percent on its revenue of January-December 2014.

  • Tobacco profits robust

    Tobacco profits robust

    Last year was a highly profitable one for tobacco companies in Morocco because cigarette sales rose steeply, according to a story in Morocco World News.

    Figures from the Administration of Customs and Indirect Taxes (ADII) indicate that Moroccans consumed 13.8 billion cigarettes in 2016, 1.2 billion more than in 2015.

    This more-than nine percent rise in sales is said to be down to two main factors, one of which has seen an increase in the number of smokers.

    But it is said to be down also to measures the state has put into combatting the illegal trade.

    A survey conducted by the ADII shows that while the illegal trade accounted for 14.02 percent of the Moroccan market in 2014, that figure fell to 12.48 percent in 2015 and to 7.46 percent in 2016.

    According to official data, there are about seven million smokers in Morocco, including 500,000 minors.

  • Altria ups dividend 8.3%, plans repurchase program

    Altria Group MO in Your Value Your Change Short position said that its board voted to boost the company’s quarterly dividend by 8.3 percent, according to The Wall Street Journal.

    The largest U.S. cigarette manufacturer in sales raised the dividend to $0.52 cents a share from $0.48 cents, meaning its yield would be about 4.9 percent based on its recent closing price of $42.46. Its previous yield was about 4.5 percent.

    The move comes as the tobacco industry in general contends with declining U.S. demand for cigarettes. Altria has gained market share thanks to promotional pricing for its cigarettes, although shipments have slowed.

    The company, however, has posted stronger results from its smokeless products, such as its Copenhagen brand of chewing tobacco and its MarkTen offering in the growing e-cigarette market.

    Altria said the dividend increase is part of its plan to return a “large amount of cash” to shareholders through dividend payouts. It also unveiled a $1 billion share-repurchase program last month.

  • Revenue up, profit down for JT

    Japan Tobacco reported revenue of ¥556.4 billion ($5.4 billion) in the first quarter of 2014, compared with revenue of ¥547.9 billion in the comparable 2013 quarter. The company made an adjusted operating profit of ¥148.9 billion during the three months, compared with ¥151.4 billion a year earlier.

    The revenue increase was driven by a robust price mix in the company’s international tobacco business and the depreciation of the Japanese yen against the U.S. dollar, despite the temporary slowdown in JT’s domestic business following Japan’s April consumption tax increase. The price mix of the international tobacco business was not enough to prevent the 2.8 percent decline in adjusted operating profit however.

    “Our international tobacco business continued to demonstrate solid earnings growth, underpinned by enhanced brand equity and pricing opportunities,” said Mitsuomi Koizumi, president and CEO of JT. “This underlines the strength of our business fundamentals at a time when the industry is contracting.

    “In Japan, after the temporary slowdown caused by the April VAT hike, Mevius is once again driving our growth in market share. Although the overall business environment remains challenging, I firmly believe we can achieve the targets set out in our business plan 2014.”