Shareholders ‘rewarded’
Philip Morris USA’s cigarette shipment volume during the 12 months to the end of December, at 122,930 million, was down by 2.5 percent on that of the 12 months to the end of December 2015, 126,018 million.
Marlboro shipments were down by 2.6 percent to 105,297 million, while shipments of other premium brands were down by 5.5 percent to 6,382 million.
Discount brand shipments were increased by 0.9 percent to 11,251 million.
PM USA’s share of the US retail cigarette market during the year to the end of December, at 51.4 percent, was up by 0.1 of a percentage point. Marlboro’s share was unchanged at 44.0 percent, while that of the company’s other premium brands was down by 0.1 of a percentage point to 2.7 percent. The company’s discount-brands’ share was up by 0.2 of a percentage point to 4.7 percent.
In reporting its results yesterday, Altria said that PM USA’s reported domestic cigarettes shipment volume had decreased by 4.8 percent during the fourth quarter of 2016, primarily driven by the industry’s rate of decline and one fewer shipping day.
‘When adjusted for calendar differences, PM USA estimates that its fourth-quarter domestic cigarettes shipment volume decreased by approximately 3.5 percent,’ it said. ‘PM USA estimates that fourth-quarter total industry cigarette volumes also declined by approximately 3.5 percent.
‘For the full year, PM USA’s reported and adjusted domestic cigarettes shipment volume decreased approximately 2.5 percent, primarily driven by the industry’s rate of decline. PM USA estimates that full-year total industry cigarette volumes also declined by approximately 2.5 percent.’
Middleton’s cigar shipments during the year to the end of December, at 1,403 million, were up by 5.9 percent on those of the year to the end of December 2015, 1,325 million.
Shipments of Black & Mild cigars were up by 6.5 percent to 1,379 million, while shipments of other brands were down by 20.0 percent to 24 million.
Middleton’s fourth quarter (5.3 percent) and full-year reported cigars shipment volume increases were said to have been driven primarily by Black & Mild in the tipped cigars segment.
The company’s share of the domestic retail cigar market was said to have been down by 0.9 of a percentage point to 26.7 percent, with Black & White’s share down by 1.0 percentage point to 26.3 percent and the share of its other brands up by 0.1 of a percentage point to 0.4 percent.
Meanwhile, USSTC’s smokeless product shipments (cans and packs) during the year to the end of December, at 853.5 million, were increased by 4.9 percent on those of 2015, 813.5 million.
Copenhagen shipments were increased by 10.6 percent to 525.1 million, while Skoal shipments were down by 2.6 percent to 260.9 million.
Other-brand shipments were down by 4.8 percent to 67.5 million.
USSTC’s share of the retail market in smokeless tobacco increased by 0.7 of a percentage point to 55.6 percent. Copenhagen’s share was increased by 2.2 percentage points to 33.8 percent, while Skoal’s share was down by 1.3 percentage points to 18.4 percent. The share of the companies’ other brands was down by 0.2 of a percentage point to 3.4 percent.
In presenting the results, Altria’s chairman, CEO and president said the company had had another “outstanding year”.
“We grew our earnings in line with our long-term objectives while returning a large amount of cash to shareholders, improving our balance sheet and strengthening our organizational capability, thus positioning Altria to continue to deliver on our long-term financial goals,” he said.
“In 2016, Altria’s total return to shareholders of 20.5 percent outpaced both the S&P 500 and the S&P Food, Beverage and Tobacco Index, marking the fourth consecutive year that total shareholder return exceeded 20 percent.
“During the year, we also rewarded our shareholders by paying out over $4.5 billion in dividends, raising our dividend by eight percent, and repurchasing over $1 billion of our shares under an expanded $3 billion share repurchase program.
“And with Altria’s support of Anheuser-Busch InBev’s landmark business combination with SABMiller, we enhanced the value of our beer investment and our position in the global brewing profit pool.”