Tag: earnings report

  • Japan Tobacco tops competition, forecast beats estimates

    Japan Tobacco, the world’s best-performing cigarette maker this year, forecast a record profit that beat analyst estimates and raised its projected annual dividend by 35 percent on rising overseas sales and a weaker yen, according to Bloomberg News.

    Net income will probably be ¥415 billion ($4.2 billion) for the year ending March 2014, the Tokyo-based company said today in a statement. The outlook is higher than the ¥412 billion average of 18 analyst estimates compiled by Bloomberg.

    Japan Tobacco, which aims to make its Mevius the No. 1 global premium brand, is benefiting as a weaker yen boosts the value of overseas revenue, which accounted for about 48 percent of the company’s total in the last fiscal year. Asia’s biggest listed cigarette maker also said it would raise its payout ratio to 50 percent by fiscal 2015, one year earlier than previously planned, to support shareholders.

  • BAT sales up 5 pct, driven by global brands

    British American Tobacco reported revenue growth of 5 percent at constant rates of exchange in the first quarter ended March 31, adding that global drive brand cigarette volumes grew by 1 percent.

    The report stated:

    • Revenue growth of 1 percent at current rates of exchange.
    • Cigarette volumes from subsidiaries fell 3.7 percent to 160 billion, with a decrease of 3.4 percent for total tobacco volumes.
    • Board confident of another year of earnings growth in line with long term strategic goals.
    • Pricing environment remains strong despite difficult trading conditions in many parts of the world, notably southern Europe.
    • If current exchange rates persist for the rest of the year, the currency headwind that adversely impacted the quarter will reverse.
    • Group has sufficient financing and facilities available for the foreseeable future.
    • There have been no material events, transactions or changes in the financial position of the Group since the year end.
    • -Shares closed Wednesday at 3548 pence valuing the company at £68.25 billion.

  • Indonesia: Cigarette makers blame costs for lower profits

    Cigarette manufacturers in Indonesia blamed higher production costs and currency fluctuations for the slow-down in their business throughout 2012.

    Revenues at PT Gudang Garam increased by 17.1 percent to reach IDR49.03 trillion ($5 billion). However, their spending also increased, jumping 25.6 percent to IDR39.84 trillion. The higher spending and losses from currency fluctuations ultimately saw the company book IDR4.01 trillion in net profits in 2012, an 18 percent decline from the previous year, according to a story in the The
    Jakarta Post.

    Another cigarette maker, PT Bentoel Internasional Investama announced that its revenues fell slightly by 2.2 percent to IDR9.85 trillion. Along with Gudang Garam, it also posted higher costs of goods sold (COGS) last year, which were up 5.5 percent to IDR8.18 trillion.

    Bentoel said that it suffered IDR323.35 billion in net losses, compared to IDR306 billion in net profits in 2011. In a statement submitted to the Indonesia Stock Exchange, it attributed the net losses to the significant increase in the clove price. At the same time, it added, sales dropped as a result of higher excise duties.

    Meanwhile, PT HM Sampoerna reported a 26 percent rise in revenues to IDR66.63 trillion in 2012, as a result of higher sales. Last year, it managed to sell up to 107.7 billion cigarettes, a rise of 17.4 percent from 2011.

    Sampoerna’s COGS were up by almost 28 percent to IDR48.12 trillion and its net profits surged 23.3 percent to IDR9.94 trillion in 2012. The increased COGS pushed the company’s net profits-to-revenue margin down to 14.9 percent from the previous 15.3 percent in 2011.

    Separately, PT Wismilak Inti Makmur reported that its revenues climbed 20.9 percent to IDR1.12 trillion from 2011, thanks to higher sales, which grew 11 percent to 2 billion cigarettes. With higher sales, the company also reported a surge in its COGS, which increased 22.6 percent to IDR814.42 billion.

    However, despite recording positive growth in revenue, Wismilak suffered from lower net profits in 2012, which slumped 40.3 percent to IDR77.2 billion.

    This year the government plans to increase excise duty by 8.5 percent.

    According to Trust Securities analyst Reza Priyambada, overall, the cigarette makers faced similar problems throughout 2012 with increasing raw material prices and higher excise. “It was like they were ‘attacked’ from the top and from the bottom,” he said.

  • Lorillard’s 1Q profit up 47 pct on higher pricing, e-cig sales, lower costs

    Lorillard’s first-quarter profit jumped 47 percent as higher prices, e-cigarette sales and lower legal expenses from a longstanding legal settlement offset a decline in traditional cigarette sales.

    The nation’s third-biggest tobacco company on Wednesday reported earnings of $328 million, or 86 cents per share, for the period ended March 31, up from $223 million, or 57 cents per share, a year ago, according to the Associated Press.

    Excluding one-time items, earnings were 66 cents per share, beating Wall Street expectations by 2 cents. That excludes a benefit of 23 cents per share in credits for disputed payments under the 1998 Master Settlement Agreement, in which some cigarette makers are paying states for smoking-related health care costs.

    Revenue excluding excises taxes rose 6 percent to $1.12 billion, matching analyst expectations, according to FactSet.

    Its shares rose $1.29, or about 3 percent, to $43.07 in morning trading.

  • Where there’s smoke, there’s still profit

    When the three major U.S. tobacco companies report their first-quarter results this week, investors can find comfort in two themes that have remained consistent for years: Cigarette volumes will fall, but profits will rise, according to a story in The Wall Street Journal.

    For the past three years, cigarette volumes have dropped around 3 percent to 4 percent annually, and analysts who follow the sector expect that trend to continue as more Americans quit smoking. But market leader Altria Group Inc. and smaller rivals Reynolds American Inc. and Lorillard Inc. keep posting higher core profits.

    Analysts expect both trends will continue as all three companies are projected to report modestly higher earnings for the first quarter, though volume could decline more steeply than historical trends, due to higher payroll taxes and still-high unemployment.

    The tobacco industry’s ability to consistently raise list prices and aggressively buy back shares have been the greatest drivers to their profitability gains. Smokeless tobacco products, including snuff and snus, have seen higher demand to help offset declining demand for traditional cigarettes. Lorillard and Reynolds are also in the early stages of selling e-cigarettes, which both have said offer potential for long-term growth. Battery-powered e-cigarettes turn heated nicotine-laced liquid into a vapor mist, and come in several flavors.