PMI’s 2013 volume shipments holed by tax regime changes in the Philippines

| February 7, 2014

Philip Morris International’s shipment volumes during the 12 months to the end of December, at 880,169 million, were down by 5.1 percent on those of the 12 months to the end of December 2012.

Volumes were down in each of PMI’s region: by 7.7 percent in Asia; by 6.5 percent in the EU; by 2.4 percent in Eastern Europe, Middle East and Africa (EEMA); and by 1.4 percent in Latin America and Canada.

Overall, the decline in volumes was said to have been caused principally by a significant erosion of total industry tax-paid volume.

In Asia, PMI’s volumes were hit by the unfavorable impact of a January 2013 excise tax increase and a surge in the prevalence of domestic non-duty paid products in the Philippines, and lower shares in Japan and Pakistan, partly offset by the company’s performance in Indonesia.

Excluding the Philippines, overall, PMI’s cigarette shipment volume decreased by 2.7 percent.

In the EU, volumes fell because of the unfavorable impact of excise tax-driven price increases, the weak economic and employment environment, the share growth of the other tobacco products (OTP) category, and the prevalence of non-duty-paid products.

Volume declines in the EEMA were due to the impact of price increases in Russia and Ukraine, an increase in illicit trade in Russia, Turkey and Ukraine, and a weak economy in Russia.

Total shipments of Marlboro cigarettes of 291.1 billion were down by 3.5 percent, due primarily to declines in the EU, notably in France, Poland and Spain, partly offset by Italy; in the EEMA, mainly in Romania, Russia, Turkey and Ukraine, largely offset by countries of North Africa; in Asia, predominantly in Japan and the Philippines, partly offset by Indonesia; and in Latin America and Canada, mainly in Argentina and Brazil, partly offset by Colombia and Mexico.

Excluding the Philippines, Marlboro cigarette shipments were down by 1.3 percent overall.

Total L&M shipments of 95 billion were up by 1.4 percent, total Bond Street shipments of 44.9 billion were down by 4.2 percent, total Parliament shipments were up by 2.9 percent to 44.7 billion, total Philip Morris shipments decreased by 7.9 percent to 35 billion, total Chesterfield shipments of 34.4 billion were down by 3.2 percent, and total Lark shipments of 28.8 billion were decreased by 10.2 percent.

Total shipments of OTP, in cigarette equivalent units, grew by 4.9 percent, notably in the EU, mainly in Belgium, France, Hungary and Italy.

Total shipments of cigarettes and OTP in cigarette equivalents were down by 4.7 percent.

Meanwhile, during the fourth quarter of last year, PMI’s cigarette shipments, at 223,199 million, were down by 4.3 percent on those of the three months to the end of December 2012.

Asia region shipments were down by 9.4 percent to 74,821 million, EU shipments were down by 4.9 percent to 44,437 million, and EEMA shipments were down by 1.2 percent to 76,428 million.

Latin America and Canada shipments were up by 4 percent to 27,513 million.

In announcing the results, CEO André Calantzopoulos said PMI had confronted an extremely harsh operating environment in 2013.

“Within this context, we withstood the pressures well and delivered a solid financial performance,” he said.

“As foreseen, our fourth-quarter results were particularly strong, contributing to our full-year adjusted diluted earnings per share growth of 10 percent, excluding the impact of unfavorable currency.

“This performance reflects our continued robust pricing and excellent share momentum.”

“The challenges of last year, including significant currency headwinds, are likely to persist into 2014 and are reflected in our full-year forecast for reported diluted EPS, along with significant expenditures behind the development of reduced-risk products.

“Our overarching objective remains our steadfast commitment to generously reward our long-term shareholders.”

For the full year 2013, PMI reported diluted earnings per share up by 1.7 percent to $5.26 and adjusted diluted earnings per share up by 3.4 percent to $5.40.

Reported net revenues, excluding excise taxes, were down by 0.5 percent to $31.2 billion.

Reported operating companies’ income was down by 2.7 percent to $13.8 billion, and adjusted operating companies’ income was down by 1.1 percent to $14.1 billion.

Reported operating income was down by 2.5 percent to $13.5 billion.

Category: Breaking News

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