JTI Likely to Maintain 30 Sen A Share Payout

Source from:  Business Times (Malaysia) 04/27/2009

Tobacco manufacturer JT International Bhd expects to maintain its 30 sen-a-share dividend this year but it ruled out repeating a 75 sen special payout last year. "We do not have a dividend policy, but based on our practice, we have always rewarded shareholders with more or the same dividend as the previous year," said managing director Martyn Griffiths after its annual general meeting in Kuala Lumpur yesterday. From a net dividend basis, this represents RM58.09 million, which is equivalent to 59 per cent of the 2008 net profit. JTI is expecting a tough 2009 as cigarette makers face a potential excise tax increase and the rise of illegal cigarettes. "Although it's a common perception that the (tobacco) industry tends to be more resilient, it is very important to note that the industry is not immune to the negative effects of such a slowdown. Nevertheless, we believe it is too early at this stage to predict potential negative effects of the current slowdown," Griffiths said. The company, which expanded its market share from 17.4 per cent to 17.7 per cent in 2008, hopes to increase its market share further this year, as it continues to build its brands like Winston, Mild Seven and Camel. "These brands are the strongest assets that we have in order to minimise the impact from other lower priced and lower quality cigarettes," he said. It is also still too early to forecast the impact of pictorial health warning (PHW) labels. By the middle of this year, all cigarettes must have these warning labels. "The impact of the implementation is unknown. In countries where PHWs were implemented, the impact varied from country to country. While it is possible that the implementation of PHWs will result in a negative effect to sales, our main concern is that adult smokers will switch to illegal cigarettes, which in all probability, will not be compliant with the regulations and will not contain the PHWs," he said. Enditem