PMI to host full-year results webcast

Philip Morris International is due to host a live audio webcast at www.pmi.com/webcasts from 13.00 hours Eastern Time on February 6 to discuss its 2013 fourth-quarter and full-year results, which will be issued mid-morning on the same day.

During the webcast, which will be in listen-only mode, André Calantzopoulos, CEO, and Jacek Olczak, CFO, will discuss the company’s results, the outlook for 2014, and answer questions from the investment community and news media.

The presentation slides and script will be available at www.pmi.com/earnings, and an archived copy of the webcast will be available until 17.00 hours on March 7 at www.pmi.com/webcasts.

Bali show to proceed as planned

The organizers of Inter-tabac Asia and Protobex say their event will take place Feb. 27-28 at the Bali Nusa Dua convention center, as scheduled.

Earlier, The Jakarta Post had reported that the governor of Bali had taken action to prevent the show.

The organizers say they have secured all the required approvals for a tobacco fair in Bali.

JT’s cigarette shipment up slightly but JTI’s volume down sharply

Japan Tobacco Inc reported today that its domestic cigarette sales during the nine months to the end of December, at 89.7 billion, were increased by 0.4 per cent on those of the nine months to the end of December 2012.

Core revenue for the domestic tobacco business increased by 0.5 per cent to ¥505.1 billion but adjusted EBITDA was down by 1.1 per cent to ¥224.4 billion.

JT said sales volume and core revenue had been flat in the first nine months because its steady market share growth – 59.6 per cent for the full year 2012 to 60.8 per cent during April-December 2013 – had been offset by an overall industry volume decline.

Meanwhile, JT reported today, too, that it had applied to the Minister of Finance for approval to amend the list prices of most of its domestic tobacco products in conjunction with a planned consumption tax increase on April 1.

If approved, cigarette prices would be increased in most cases by ¥10 or by ¥20 per pack; so the price of a pack of Mevius, for instance, would rise from ¥410 to ¥430.

JT’s consolidated results included first nine-month figures for Japan Tobacco International, which saw its cigarette (and cigarette equivalent) shipments during the period January 1, 2013 to September 30, 2013, at 311.2 billion, down by 5.1 per cent on those of the equivalent period of 2012.

At the same time, global flagship brand shipments were down by 2.1 per cent to 198.2 billion.

Shipments were said to have been affected in part by industry contraction in Russia and Western Europe.

JTI’s core revenue increased by 25.0 per cent to ¥878.9 billion and its adjusted EBITDA was up by 31.9 per cent to ¥350.7 billion.

JT’s total (including also its pharmaceutical, beverage and food businesses) consolidated revenue grew by 10.7 per cent to ¥1,779.9 billion and its adjusted EBITDA increased by 16.1 per cent to ¥574.1 billion. Operating profit was up by 25.0 per cent to ¥514.4 billion.

“Internationally, we achieved robust growth driven by strong price/mix,” said Mitsuomi Koizumi, president and CEO. “Despite industry volume contraction, market share growth in most key markets confirmed solid business fundamentals.

“In Japan, robust performance of Mevius further expanded our overall market share.

“We will continue to strengthen the brand equity of our key brands such as Mevius, Seven Stars and Pianissimo, aiming to further increase our market share.

“The results over the last three quarters give me strong reason to believe that we will achieve our full year targets.”

Meanwhile, JTI reported separately that its cigarette (and cigarette equivalent) shipments during the year to the end of December, at 416.4 billion, were 4.6 per cent down on those of January-December 2012, 436.5 billion.

At the same time, global flagship brand shipments were down by 0.8 per cent to 266.6 billion.

Core revenue was up by 3.9 per cent to US$12,273 million and adjusted EBITDA was increased by 7.5 per cent to $4,623 million.

From 2015, JT and JTI should both be reporting their results based on a financial year that ends on December 31.

JT said today that its board of directors had resolved to change the company’s accounting period with the closing date moving from March 31 to December 31.

The change is subject to approval of an amendment to the company’s Articles of

Incorporation at the ordinary general meeting of shareholders due to be held in late June, and approval by the Minister of Finance, pursuant to the Japan Tobacco Inc. Act.

Consumer choice delivered by new filter

Japan Tobacco Inc. today announced the pending launch of Mevius Control One, which will feature the ADJUSTABLE® filter that, reportedly, can be used to vary tar levels.

The new 1 mg tar product will go on sale in the prefectures of Fukuoka, Nagasaki, and Saga in mid-February.

The filter is such that consumers can rotate it from a maximum to a minimum setting, an action that increases the volume of air flowing into the filter and, therefore, lowers the level of flavour and aroma.

PMI restructuring for growth in Egypt, North Africa and the Middle East

Philip Morris International is to restructure its business in Egypt as part of an initiative aimed at enhancing its profitability and growth in markets across North Africa and the Middle East.

‘The new business model entails a new contract manufacturing agreement with our long-standing, strategic business partner, Eastern Company S.A.E., the creation of a new PMI affiliate in Egypt and a new distribution agreement with Trans Business for Trading and Distribution LLC,’ PMI said in a press note posted on its website yesterday.

To accomplish this restructuring and to ensure a smooth transition to the new model, PMI will record, in the fourth quarter of 2013, a charge of about $0.10 to its 2013 full-year reported diluted earnings per share.

“Today’s announcement marks the next stage in the highly successful evolution of our business in Egypt, which could not have been achieved without the significant contribution of our long-established partner, Al Mansour International Distribution Company S.A.E.,” said Miroslaw Zielinski, PMI’s president, Eastern Europe, Middle East & Africa Region and PMI Duty Free.

“PMI’s new operational model will ensure business continuity in this dynamic market, where PMI achieved currency-neutral, double-digit earnings growth and strong share gains in 2013. Furthermore, going forward, the new model will assure the continued expansion of our market presence and an increase in our share of the profit pool.”

PMI said that it was the leading international tobacco company in Egypt, where its products are contract manufactured by Eastern Co.

Its market share last year, at 22.9 per cent, was up by 4.7 percentage points on that of its 2012 market share, with the share of its premium brand, Marlboro, up by 1.1 percentage points to an estimated 7.3 per cent, and the share of its mid-priced L&M up by 3.3 percentage points to an estimated 13.1 per cent.

Overall, about 80 billion cigarettes were sold on the Egyptian market last year, about 2.8 per cent more than were sold during 2012.

Last year, the retail pack price of Marlboro, which enjoys close to a 75 per cent share of the premium segment, was E£15.50 (about $2.25).

Growers line up for start of sales season

About 85,360 farmers have so far registered for Zimbabwe’s 2014 tobacco selling season, up from about 65,000 at the same stage of last year, according to a story in The Standard quoting the Tobacco Industry Marketing Board.

The board’s chairperson, Monica Chinamasa, attributed the increase to the ‘lucrative cash payments’ that come with selling tobacco.

“That is the only sector which is presently paying farmers well,” said Chinamasa. “Maize is associated with delayed payments and low prices while cotton is even worse.

“Secondly, tobacco has a ready market. Every farmer wants to grow something which they can sell.”