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High levels of smoking among Saudi’s young women

| February 9, 2015

Sixty five percent of Saudi secondary schoolgirls and 45 percent of the country’s intermediate schoolgirls are ‘smokers’, according to a story in Arab News quoting the results of a recently-published survey.

The survey, conducted by the Faculty of Medicine at the Jeddah-based King Abdulaziz University, said the rates of smoking posed a ‘real threat’ to the health of Saudi women in the long term.

In an earlier study, Najran University was said to have found that one-third of the Saudi population smoked on a regular basis.

And, according to a story in the Al-Madina daily, Saudi Arabia ranks second and fifth respectively at the GCC (Gulf Co-operation Council) and global levels in respect of the proportion of female smokers.

The rise in the number of female teenagers taking up smoking has been blamed on their wider exposure to the cultures of foreign countries through the increased use of social media and mobile applications, and to the spread of electronic cigarettes.

The definition of a smoker, as used by those conducting the surveys, was not given in the story.

Non-duty-paid cigarettes hit legitimate market

| February 9, 2015

Taxed cigarettes’ share of the Philippines’ market declined last year, according to a story in The Philippine Star quoting Philip Morris International’s fourth quarter and full-year report.

PMI was quoted as saying that the estimated industry-wide tax-paid cigarette volume fell by 4.6 percent to about 82.3 billion units last year, reflecting the prevalence of domestic non-duty paid products.

The company said that while its shipment volume in the Philippines decreased by 0.2 percent to 68.4 billion units, its share of the estimated total tax-paid cigarette industry rose by 3.7 percentage points to 83 percent.

In the fourth quarter of 2014, alone, the estimated industry-wide tax-paid cigarette volume had fallen by 12.9 percent to 21.8 billion units, reflecting a higher incidence of non-tax-paid volume.

CEO André Calantzopoulos said PMI remained upbeat about its prospects in the Philippines despite lackluster sales.

“While the Philippines continued to be a challenge and a drain on our 2014 income performance, we have recently witnessed significant positive price movements at the lower end of the market,” Calantzopoulos said.

New CEO for Scandinavian Tobacco Group

| February 9, 2015

Niels Frederiksen will take over on March 1 from Anders Colding Friis as the CEO of the Scandinavian Tobacco Group (STG), according to a story in the Copenhagen Post.

Frederiksen, who has more than 15 years of experience in the tobacco industry, is currently STG’s executive vice president of the global supply chain and a member of the group’s executive board.

Tobacco season to be pushed back

| February 6, 2015

Zimbabwe is likely to push back the start of its tobacco marketing season by about a month from the traditional mid-February period.

Tobacco Industry and Marketing Board Chief Executive Dr. Andrew Matibiri said that most of the dry-land crop, which accounts for most of the tobacco grown, is still in the early stages of maturing.

“Our teams are still going around the country to assess the condition of the crop but it appears that we will be late this year due to the rains.”

“The season is most likely to open in March but a clearer position will emerge when the board meets next week, ” he said.

Dr. Matibiri also said that most farmers who grew the irrigated crop were now curing but this tobacco was largely destined for the contract system.

Zimbabwe’s tobacco is sold under two systems, the auction where individual farmers sell the crop at the auction floors and the contract where farmers are contracted to produce the crop by a contractor who supplies them with inputs.

EU shines glimmer of light on PMI’s gloomy volumes

| February 6, 2015

Philip Morris International’s shipment volumes during the 12 months to the end of December, at 855,954 million, were down by 2.8 percent on those of the 12 months to the end of December 2013, 880,169 million.

Volumes were increased by 0.1 percent to 185,197 million in its EU region, but fell in each of its other regions: by 2.7 percent to 94,706 million in Latin America and Canada; by 2.9 percent to 287,923 million in Eastern Europe, Middle East and Africa (EEMA); and by 4.4 percent to 288,128 in Asia.

Overall, the 2.8 percent decline in volumes, which excludes acquisitions, was said to have been caused principally by: in the EEMA region, market performances in Kazakhstan, Russia and Ukraine, partially offset by those in Algeria and Turkey: in Asia, a lower total market, lower market share and the unfavorable impact of an adjustment in distributor inventories in Japan, as well as market performances in Australia, Indonesia and Pakistan; and in the Latin America and Canada region by market performances in Canada and Mexico.

The overall decline was partially offset by the positive impact of market share growth in the EU, EEMA and Latin America and Canada regions, and by the slight shipment growth in the EU.

Total shipments of Marlboro cigarettes of 283.0 billion were down by 2.8 percent, due primarily to declines in: the EU, notably in France, Italy and Poland, partly offset by gains in the Czech Republic and Spain; the EEMA, mainly in Egypt, Russia and Ukraine, partly offset by gains in Algeria and Saudi Arabia; in Asia, due almost entirely to Japan, partly offset by the Philippines; and in Latin America and Canada, due prominently to Mexico. The overall decline in Marlboro shipments was partially offset by the positive impact of market share growth in the EU and EEMA regions. Marlboro’s market share was flat in Asia, and in Latin America and Canada.

Total Parliament shipments were increased by 5.6 percent to 47.2 billion, total Chesterfield shipments were up by 22.6 percent to 42.1 billion, total L&M shipments of 94.2 billion were down by 0.9 percent, total Bond Street shipments of 43.6 billion were down by 2.9 percent, total Philip Morris shipments decreased by 8.7 percent to 31.9 billion, and total Lark shipments decreased by 1.3 percent to 28.5 billion.

Total shipments of OTP, in cigarette equivalent units, grew by 3.4 percent, mainly reflecting growth in fine-cut, notably in Belgium, the Czech Republic, Hungary and Poland, partly offset by performances in France and Germany.

Total shipments of cigarettes and OTP in cigarette equivalents were down by 2.5 percent.

Meanwhile, during the fourth quarter of last year, PMI’s cigarette shipments, at 214,892 million, were down by 3.7 percent on those of the three months to the end of December 2013, 223,199 million.

EU region shipments were down by 0.2 percent to 44,370 million; EEMA shipments were down by 2.5 percent to 74,495 million; Latin America and Canada shipments were down by 2.9 percent to 26,705 million; and Asia region shipments were down by 7.3 percent to 69,322 million.

In announcing the results, CEO André Calantzopoulos, said PMI had delivered a solid currency-neutral performance during 2014, reflecting robust pricing, strong market share gains, notably in the EU region, and very substantial progress in addressing the specific market challenges that it had outlined at the beginning of the year.

“We successfully executed on our key strategic initiatives, including the pilot launches of our reduced-risk product, iQOS, the roll-out of the Marlboro 2.0 architecture and the optimization of our manufacturing footprint,” he said.

“Despite a historically high adverse currency headwind, we enter 2015 with strong business momentum that underpins our target annual growth rates, excluding currency and acquisitions, of four percent to six percent for net revenues, six percent to eight percent for adjusted operating companies’ income and eight percent to 10 percent for adjusted diluted earnings per share.”

“We remain steadfast in our aim to return around 100 percent of our free cash flow to our shareholders. However, given the recent extreme currency volatility, we are focused on managing our cash flow prudently and on maintaining our financial flexibility for business development opportunities. Consequently, our full-year guidance does not currently envisage any share repurchases in 2015, although we will revisit the potential for such purchases as the year unfolds depending on the currency environment.”

For the full year 2014, PMI reported diluted earnings per share down by 9.5 percent to $4.76 and adjusted diluted earnings per share down by 7.0 percent to $5.02.

Reported net revenues, excluding excise taxes, were down by 4.6 per to $29.8 billion.

Reported operating companies’ income was down by 12.4 percent to $12.1 billion, and adjusted operating companies’ income was down by 10.5 percent to $12.6 billion.

Reported operating income was down by 13.4 percent to $11.7 billion.

Imperial launching lifestyle electronic cigarette

| February 6, 2015

Imperial Tobacco is due to launch a new electronic cigarette in France on Monday, a move that, according to a story by Martinne Geller for Reuters, will give the company a lifestyle brand to stand alongside its existing brand, Puritane, which is marketed more as a healthcare product.

The new brand, called Jai, will be sold in tobacconists, while Puritane is sold online and exclusively through a pharmacy chain in Britain.

“We believe there are different consumer groups with different needs,” Heidi Theys, head of vaping category development at Imperial’s Fontem Ventures unit, which sells non-tobacco products, was quoted as saying.

Fontem has an application pending with Britain’s Medicines and Healthcare Products Regulatory Agency to have Puritane approved as a medical device, which would allow it to make claims related to health or smoking cessation.

Jai is due to be launched in Italy by the end of the month.

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