PMI’s volume down in first quarter

Philip Morris International’s cigarette shipment volume during the first quarter of 2016, at 196,041 million, was down by 1.4 percent on that of the first quarter of last year, 198,757 million.

Volume was increased by 2.6 percent to 45,993 million in the company’s EU region, by 2.4 percent to 21,700 million in its Latin America and Canada region and by 0.8 percent to 63,126 million in its Eastern Europe, Middle East and Asia (EEMA) region; but it was down by 7.0 percent to 65,222 million in its Asia region.

PMI’s reported that its total cigarette shipment volume decreased 1.7 percent excluding favorable net estimated inventory movements, reflecting declines in Asia, principally in Indonesia, Pakistan and the Philippines, partly offset by the company’s performance in Korea. The decrease was partly offset by growth in: the EU, driven notably by the company’s performances in France, Italy, Poland and Spain, partly offset by those in the UK; the EEMA, driven by results in Egypt, Tunisia, Turkey and Ukraine, partly offset by results in Algeria and Russia; and Latin America & Canada, driven mainly by the performance in Mexico, partly offset by that in Argentina.  The decrease was further offset by the favorable estimated impact of the leap year.

Marlboro shipments of 67,985 million were up by 1.1 percent, reflecting growth in: the EU, notably in Germany, Italy and Spain, partly offset by the performance in the UK; Asia, driven by the company’s performances in Korea and the Philippines, partly offset by its results in Indonesia and Vietnam; and Latin America & Canada, driven by its performance in Mexico, partly offset by that in Argentina. The growth was partly offset by declines in the EEMA, mainly due to the performance in North Africa, partly offset by performances in Saudi Arabia and Turkey.

L&M shipments of 23,690 million were up by 4.5 percent; Parliament shipments of 10,137 million were up by 5.9 percent; Bond Street shipments of 9,721 million were up by 5.9 percent; Chesterfield shipments of 10,176 million were increased by 6.7 percent; Philip Morris shipments of 9,209 million were up by 18.6 percent; and Lark shipments of 6,501million were increased by 0.9 percent. Shipments of other brands, taken together, were down by 11.6 percent to 58,622 million.

PMI’s shipment volume of other tobacco products (OTP), in cigarette equivalent units, was up by 2.8 percent, while the total volume of cigarettes and OTP was down by 1.2 percent.

PMI’s market share was said to have increased in a number of key markets, including Australia, Belgium, Canada, Egypt, France, Germany, Kuwait, Mexico, the Netherlands, the Philippines, Poland, Saudi Arabia, Spain, Switzerland, Turkey and the UK.

PMI said that its reported diluted earnings per share, at $0.98, were down by $0.18 or 15.5 percent on those of the first quarter of 2015; or, excluding the effects of currency factors, were up by $0.01 or 0.9 percent.

Adjusted diluted earnings per share, at $0.98, were down by $0.18 or 15.5 percent from $1.16, though excluding currency factors, adjusted diluted earnings were up by $0.01, or 0.9 percent.

Reported net revenues, excluding excise taxes, were down by 8.1 percent to $6.1 billion; or, excluding currency factors and the impact of acquisitions, reported net revenues were up by 2.4 percent.

Reported operating companies’ income was down by 13.9 percent to $2.5 billion; or, excluding currency factors and the impact of acquisitions, reported operating companies’ income was down by 0.9 percent.

Adjusted operating companies’ income was down by 13.9 percent to $2.5 billion; or, excluding currency factors and the impact of acquisitions, adjusted operating income was down by 0.9 per cent.

Reported operating income was down by 13.9 percent to $2.5 billion.

“In line with our expectations, our first-quarter financial results reflected a tough comparison with the exceptionally strong first quarter of last year,” said CEO André Calantzopoulos, in presenting the first quarter results.

“Today we raised our full-year guidance as a result of moderating currency headwinds, which continues to represent a currency-neutral adjusted diluted EPS growth rate of approximately 10 percent to 12 percent versus 2015. We expect the growth to be skewed towards the second half of this year, and the fourth quarter in particular.

“Our confidence is guided by moderating industry volume declines and robust pricing, underpinned by our superior cigarette brand portfolio, led by our flagship brand, Marlboro.  We are also excited by the progress, best represented by our impressive HeatStick share momentum in Japan, of our Reduced-Risk Product, iQOS.”