Japan Tobacco Inc’s domestic cigarette volume sales during the three months to the end of March, at 19.5 billion, were 15.0 percent down on those of the three months to the end of March 2017, 23.0 billion.
JT reported today that, at the same time, the industry’s cigarette volume, which was impacted by sales of reduced-risk products (RRP), was down by 15.6 percent from 37.7 billion to 31.8 billion.
The company’s market share rose by 0.5 of a percentage point to 61.4 percent.
JT estimated the overall RRP market in Japan during the first quarter at about 20 percent of the total tobacco industry volume. JT’s RRP sales volume was said to be 0.3 billion cigarette equivalent units with Ploom TECH’s market share estimated at between three and four percent where it was available.
JT’s domestic tobacco business core revenue declined by 10.1 percent, from ¥143.9 billion to ¥129.3 billion, while adjusted operating profit declined by 14.4 percent from ¥57.2 billion to ¥48.9 billion.
Meanwhile, Japan Tobacco International’s shipment volume during the three months to the end of March, at 98.4 billion, was increased by 7.3 percent on that of the three months to the end of March 2017, 91.7 billion. At the same time GFB (global focus brands) volume increased by 3.1 percent from 60.2 billion to 62.0 billion.
JT said that JTI’s increase in volumes had been driven by acquisitions in Ethiopia, Indonesia and the Philippines, and favorable inventory movements. Excluding these, total shipment volume declined by 2.2 percent.
‘Volume increases across Iran, Romania, Spain, Turkey and emerging markets were unable to offset the impact of the industry volume contraction, notably in France, Russia and Taiwan,’ JT reported.
‘GFB shipment volume increased 3.1 percent growing across all clusters, mainly driven by the growth of Winston, Camel and LD.
‘Total and GFB market share grew in the key markets of France, Russia, Spain and Taiwan.’
JTI’s core revenue during the first quarter, at ¥294.8 billion, was increased by 6.8 percent on that of the first quarter of 2017, ¥276.0 billion, while adjusted operating profit increased by 4.7 percent from ¥92.0 billion to ¥96.3 billion.
“Our first quarter results illustrate a solid start for achieving our full year profit target in a business environment which remains challenging,” said Masamichi Terabatake, president and CEO of the JT Group.
“Our traditional tobacco products, the platform of the Group’s profitability, delivered robust top-line growth led by pricing in the international tobacco business. We also increased our market share in the Japanese domestic tobacco business driven by MEVIUS.
“M&A activities last year contributed to our top-line growth following our strategic geographical expansion. Our recent decision to acquire Donskoy Tabak companies will reinforce our No.1 position in Russia after the closing.
“We continue to invest in Reduced-Risk Products on a global basis, as these will contribute to our future growth and ensure a wide choice of products for consumers. In Japan, we will increase our presence both geographically and through product diversification.
“Since our operation of production equipment for the tobacco capsules is being stabilized with our effort to increase its output, we will start a nationwide roll-out of Ploom TECH in June and expand to convenience stores as of July. We also are aiming to launch a new heated tobacco product as early as the year-end or early 2019.”
Tag: International
New product promised
Film festival deadline near
The organizers of the Global Forum on Nicotine’s (GFN) first film festival have announced that the deadline for the submission of entries is April 16.
The festival, which is focused on tobacco harm reduction, will run alongside the GFN’s fifth annual conference, GFN18.
Entries must be submitted to filmfest@gfn.net.co with either a secure Vimeo or YouTube link.
The festival is being organised in association with Attention Era Media, the makers of A Billion Lives, which was shown at a previous GFN event.
Announcing the festival earlier this year, Aaron Biebert, the director of A Billion Lives, who will curate the festival, said that reversing propaganda and fear tactics would take more than a single movie. “It will take a community of educators, leaders, and influencers who are educated and excited,” he said. “A film festival focused on tobacco harm reduction will make a huge impact by inspiring filmmakers to take up the cause and help get the truth in front of the public. I am delighted to be leading this effort and believe that together we can make a difference.”
The festival will feature films up to 15 minutes long.
The makers of the films chosen for inclusion will be invited to attend GFN18 and the organisers hope to have short Q&A sessions with them following the screenings, which will take place within the conference venue and will be open to everyone attending the conference.
The conference is scheduled to be held at the Marriott Hotel, Warsaw, Poland, on June 14-16.
The festival will take place on June 15 and 16, with each of the entries being eligible for the ‘Best Picture’ award, to be decided by a jury, chaired by Biebert, who will also present the award during the closing session of the GFN.BAT volumes increased
British American Tobacco’s cigarette and tobacco-heating product (THP) volumes during the 12 months to the end of December, at 686 billion, were increased by about 3.2 percent on those of the 12 months to the end of December 2016, 665 billion. On an organic basis, volumes fell by about 2.6 percent.
Tobacco volumes which include as well as cigarettes and THPs, other tobacco products whose volumes are stated in cigarette stick equivalents, were increased by about 3.6 percent, from 689 billion to 714 billion.
In a preliminary announcement about its results for the year to the end of December 2017, which saw it complete its acquisition of Reynolds American Tobacco in July, BAT said that its market share in its key markets had increased last year by 0.4 of a percentage point. This growth was said to have been driven by the group’s global drive brands (GDB), including THPs, whose market share, excluding the US, had increased by 1.1 percentage points on volume up by 7.6 percent on an organic basis.
The company’s cigarette and THP volumes were increased in its Western Europe region from 120 billion to 122 billion. But they were down in its EEMEA (Eastern Europe, Middle East and Africa) region from 236 billion to 228 billion, down in its Americas region from 113 billion to 107 billion, and down in its Asia-Pacific region from 196 billion to 193 billion.
BAT’s revenue during the year to the end of December, at £20,292 million, was increased by 37.6 percent on that of 2016, £14,751 million; while adjusted organic revenue, at £15,712 million, was increased by 6.5 percent.
Profit from operations, at £6,476, was increased by 39.1 percent; while adjusted organic profit from operations was up by 7.8 percent to £5,910 million.
Diluted earnings per share were up by 634.0 percent to 1,830.0p; while adjusted diluted earnings per share were increased by 14.9 percent to 284.4p.
Dividend per share was up by 15.2 percent to 195.2p.
“The Group delivered another set of strong financial results in 2017, despite a challenging trading environment,” said chief executive Nicandro Durante (pictured). “Following the transformational deal in July 2017, these results benefit from the acquisition of RAI while also demonstrating the strength of the organic business.”
Durante said also that BAT had made “excellent progress” with its next generation product business. “Our flagship THP, glo, first launched in Japan in December 2016, reached 3.6 percent market share by the end of 2017 – having been rolled out nationally from October 2017. Since then, 50 percent of the overall category growth in Japan has been from glo – demonstrating its strong consumer appeal in a very short period. Good initial progress is also being made in our other launch markets of South Korea, Russia, Canada, Romania and Switzerland.
“In the vapor category, Vype is now present in nine markets and we remain market leader in the UK, with Vype and Ten Motives combined delivering around 40 percent share of measured retail in December 2017. We also lead the vapor category in Poland. In the US, the Vuse range of products continues to have a significant presence in the market. We see the rapidly developing vapor category, as a whole, contributing significantly to our long-term growth ambitions in NGPs.”Scholarships on offer
Knowledge Action Change (KAC) and the Global Forum on Nicotine (GFN) have launched the 2018 Tobacco Harm Reduction Scholarship Programme.
In announcing the inaugural program, the GFN organizers said they wanted people to learn from the GFN and have the opportunity to implement that learning in their home countries.
Fifteen scholarships will be offered during the year, with funds available to support agreed projects up to the value of $7,500.
The scholarships will start at the GFN conference on June 13. The conference is scheduled to be held at the Marriott Hotel, Warsaw, Poland, on June 14-16.
The organizers say that the scholarships are intended to:- build research capacity in the field of tobacco harm reduction;
- develop the evidence base;
- raise awareness of research and its implications for public health policy;
- enable consumers to make more informed personal health choices;
- improve the implementation and understanding of tobacco harm reduction.
Applications are invited from people with an interest in tobacco harm reduction; such as:
- people intending to enter the field of research into tobacco harm reduction and/or public health;
- students
- researchers and scientists
- medical professionals
- writers
- Internet and social media professionals.
More information is at: https://gfn.net.co/scholarships
Universal looking forward
Universal Corporation reported yesterday that its net income for the nine months to the end of December was $75.1 million, or $2.94 per diluted share, compared with $73.4 million, or $2.63 per diluted share, during the same period of the prior fiscal year.
For the third fiscal quarter to the end of December, net income was $45.4 million, or $1.78 per diluted share, compared with net income for the prior year’s third quarter of $53.6 million, or $1.92 per diluted share.
Net income for the nine months and third quarter included a one-time reduction in income tax expense of $10.5 million, or $0.41 per diluted share, resulting from the enactment of the Tax Cuts and Jobs Act in December 2017.
Operating income for the nine months to the end of December of $111.2 million was down by $7.3 million compared to that of the nine months to the end of December 2016. Operating income for the third quarter of fiscal year 2018 fell to $59.7 million from $83.2 million.
“As expected, our earnings from operations so far in fiscal year 2018 have been impacted by lower Burley crop volumes in Africa and fewer carryover crop sales in North America, offset in part by the return to normal crop volumes in Brazil, where we continue to see the benefits of higher volumes and lower factory unit costs,” said George C. Freeman, III, Chairman, President, and CEO. The Burley crop shortfall will predominately affect our third and fourth fiscal quarters when we typically ship African crops.”
Looking ahead, Freeman said Universal expected that its volumes for the fourth quarter of fiscal year 2018 would be lower than those achieved in the fourth quarter of the prior year, given reduced crop volumes available for sale in Africa this year, which typically had strong shipment volumes during the fourth fiscal quarter. “As a result, we continue to believe our total lamina volumes for fiscal year 2018 will be modestly lower than those volumes in fiscal year 2017.
“Looking forward, the next crop cycle, which will be reflected in our fiscal year 2019 results, has begun with green tobacco purchases in Brazil. The crop season is off to a good start, and assuming the recovery of African volumes and overall market stability, we believe that our fiscal year 2019 total sales volumes will be higher.”JTI volumes down in 2017
Japan Tobacco Inc. reported today that its domestic cigarette sales volume during the year to the end of December, at 92.9 billion, was down by 12.5 percent on that of the year to the end of December 2016, 106.2 billion.
JT said that the fall in volume had been due mainly to the contraction in industry-wide volumes caused by the expansion of the reduced-risk products category, and the continuing long-term market decline.
The industry-wide volume during the year to the end of December was given as 151.4 billion, down 12.9 percent from the volume recorded during 2016, 173.8 billion.
JT’s cigarette market share increased by 0.3 of a percentage point to 61.3 percent, year to year.
JT’s revenue during the year to the end of December, at ¥626.8 billion, was down 8.4 percent on that of the year to the end of December 2016, ¥684.3 billion, while core revenue fell by 9.1 percent to ¥590.6 billion as the cigarette sales volume decline offset the benefit of a Mevius-brand retail price rise last year, and increased sales of Ploom TECH, which rose above ¥10 billion. Core revenue excludes the revenue from distribution of imported tobacco on the domestic market, revenue from domestic duty-free sales, revenue from JT’s China business, and revenue from the sale of reduced-risk products such as Ploom TECH devices and capsules.
Adjusted operating profit during the year to the end of December fell by 10.7 percent to ¥232.3 billion, from ¥260.2 billion during the year to the end of December 2016. The fall in adjusted operating profit came about because of the lower core revenue and despite cost decreases having been made.
Meanwhile, Japan Tobacco International’s total tobacco (including cigarettes, fine-cut, cigars, pipe tobacco and snus, but excluding water-pipe tobacco, reduced risk products and contract manufactured goods) shipment volume during the year to the end of December, at 398.5 billion, was down by 0.1 percent on that of the year to the end of December 2015, 398.7 billion.
But JTI’s global flagship brand shipment volume was increased by 0.8 percent from 283.7 billion to 285.9 billion.
JT reported that JTI’s shipment was stable as industry volume contraction was almost offset by volume increases primarily in Iran and emerging markets, market share gains and acquisitions in Indonesia and the Philippines. Excluding acquisitions, JTI’s volume declined 2.1 percent.
JTI’s revenue during the year to the end of December, at ¥1,237.6 billion, was increased by 3.2 percent on that of the year to the end of December 2016, ¥1,199.2 billion, while core revenue rose by 3.4 percent to ¥1,177.0 billion.
Adjusted operating profit was up by 4.5 percent to ¥351.3 billion.
JT’s consolidated revenue for the year to the end of December, at ¥2,139.7 billion, was down by 0.2 percent on that of the year to the end of December 2016, ¥2,143.3.
Operating profit was down by 5.4 percent to ¥561.1 billion, while adjusted operating profit was down by 0.3 percent to ¥585.3 billion.
Masamichi Terabatake, president and CEO of the JT group said that the 2017 results demonstrated the group’s ability to deliver solid profit in an ever-challenging business environment.
“In my first year as CEO, I will focus on ensuring success in the domestic tobacco business, an essential driver for our future growth,” he said. “We will also continue to actively invest in both traditional tobacco and reduced-risk products with the ambition to hold the No.1 market share position in reduced-risk products in Japan by the end of 2020.
“I believe our management principle is well suited to achieve this sustainable profit growth in the mid- to long-term. We need to enhance our organization’s ability to face the competition by being faster and bolder across all our operations.
“We are confident that we can deliver mid to high single-digit annual average growth rate in adjusted operating profit at constant FX in the mid to long-term with our planned investments. Moreover, we are committed to growing the dividend per share year-on-year in line with mid-term profit guidance.”Cigar-smoking leader
The makers of a Churchill biopic have been criticised by historians after they felt it was necessary to warn viewers that scenes with the former prime minister smoking a cigar were ‘based solely on artistic consideration’, according to a story by Callum Adams for the Electronic Telegraph.
In the opening scenes of Darkest Hour, ‘Churchill’s’ face is lit by a cigar as he sits in a darkened room, and, indeed, the former British prime minister is shown smoking throughout the film.
Historians and biographers have criticised the disclaimer, which appears in the final credits, alerting viewers to the ‘serious health risks associated with smoking and with second-hand smoke’.
‘The depictions of tobacco smoking contained in this film are based solely on artistic consideration and are not intended to promote tobacco consumption,’ the health warning begins.
Mary Beard, professor of Classics at the University of Cambridge, reportedly told the Mail on Sunday newspaper that, in her opinion, the disclaimer only added to the temptation, while the historian, Richard Evans, a specialist in modern European history at Cambridge University, said he didn’t suppose the film would prompt many to rush out and buy cigars.
The idea that ordinary people are unlikely to rush out and buy cigars is supported by financial considerations. According to a story by John Houck for Inquisitr, the moviemakers, wanting the film to be as authentic as possible, used the Cuban brand smoked by Churchill, Romeo y Julieta – at a cost of $20,000 over the length of the filming.
Meanwhile, the royal biographer Hugo Vickers suggested that the film-makers should have added a further line stating: “Sir Winston Churchill lived to be 90”.
BAT outperforming
British American Tobacco expects its full-year volume to be down about four percent.
In its second-half pre-close trading update for 2017, the company said it had again outperformed the industry, driven by continued good share growth.
Second-half organic volume was expected to benefit from the phasing of shipments in a number of key markets, including Pakistan, partly offset by the impact of a significant excise increase in the GCC.
‘The national rollout of glo in Japan is complete and glo has continued its excellent performance with national share now at 2.7 percent,’ said BAT.
‘glo has also been successfully launched in Canada, Switzerland, South Korea and Russia, and is now available in a total of five countries.
‘In vapour, our share in Western Europe continues to grow and the performance of VUSE in the US remains strong.’
Meanwhile, the company said the integration of Reynolds American Inc. was on track, ‘with the businesses performing strongly, driven by good share growth and pricing’.
Myanmar to export cigars
The Burmese Tobacco Trading Company (BTTC) has said it is to collaborate with the Robaina tobacco family to roll out the Don Alejo Robaina Cigar brand next year in Europe, North America and Asia.
According to a BTTC press note issued through PRNewswire, BTTC was set up by the Huang family, described as a ‘prominent Chinese-American group of business owners’.
‘Together with Robaina family engineers, they discovered promising land in Pyin Oo Lwin, Myanmar (Burma) that is very similar to the tobacco farmlands of Pinar del Rio, Cuba,’ the press note said.
‘The now-established farm: “Myanmar Farms” boasts close to 80 acres, and has been supervised and managed by select members from the Robaina family’s team.’
“The Robaina team members are extremely excited with the quality of tobacco that has been produced at Myanmar Farms,” said Jimmy Huang.
“The altitude, climate, and rich virgin-soil in Burma was an undiscovered treasure until now. We look forward to the roll out of our premium cigars in the near future.”
The Don Alejo Robaina brand will be dedicated to the memory of the ‘Godfather of Cuban tobacco’, Don Alejandro Robaina.
‘The Robaina family is globally known for growing some of the highest quality tobacco worldwide, from their plantations in Pinar del Rio, Cuba,’ the press note said.
‘Alejandro Robaina, the long-time family patriarch was globally recognized by many as the “Godfather of Cuban tobacco”. After his passing, the Robaina family continues to carry out his legacy in Cuba.
‘They are endeavoring to further the Robaina surname, in this case, by working with the Burmese Tobacco Trading Company. The Robaina family looks forward to producing a truly unique cigar using the time honored practices of Alejandro Robaina.’
FSFW calls for public input
The Foundation for a Smoke-Free World (FSFW) is launching two online processes designed to inform and guide the Foundation’s long-term research initiatives.
The first is a public comment period to solicit input on research priorities. The second is a call for letters of intent for early scoping grants that will help assess areas of research with the greatest potential to accelerate the end of smoking.
Researchers, policy makers, smokers and others with relevant experience or expertise are being invited to contribute.
“We encourage everyone with an interest in reducing death and disease from smoking to share informed opinions and creative suggestions on where we should focus our research efforts,” said Dr. Derek Yach, the founder and president of the FSFW.
“In particular, we are looking for new ideas, fresh thinking and innovative collaborations – expanding beyond the traditional tobacco control community – that will deliver dramatic and rapid progress toward a smoke-free world.”
In a press note issued on Tuesday, the FSFW said that since the Foundation’s formation in September, its leadership had been listening to and engaging with public health experts from around the world in a variety of forums, including conferences, one-on-one meetings and a Foundation-hosted research symposium.
‘Through these discussions and experiences, it became apparent that some potential areas of research exploration will need more detailed scoping and development before the Foundation issues large-scale requests for research proposals in 2018,’ the note said.
‘To prepare for the launch of an aggressive set of research programs in 2018, the Foundation is now accepting letters of intent for early scoping grants to gather more information on potential research topics related to smoking cessation, harm reduction and alternative livelihoods for tobacco farmers. ‘These grants are detailed on the Foundation’s website, www.smokefreeworld.org. Letters of intent are due Monday, December 11, and are the first step of an application process that will culminate with the awarding of initial scoping grants in January.’
In parallel, the Foundation is asking for public input on four questions to help determine its highest research priorities.
‘The questions are designed to identify areas of unmet need and potentially significant impact on smoking cessation, harm reduction, and alternative livelihoods for tobacco farmers,’ the note said. ‘The public can respond to the questions through the Foundation’s website until December 18. The questions will inform a draft version of the Foundation’s research agenda that will go online for public review in early 2018.’
