PMI Cigarette Shipments Fall

Source from:  Tobacco Reporter 10/26/2009

Philip Morris International's cigarette shipment volume during the third quarter of this year, at 219.3 billion, was down by 2.9 per cent on that of the third quarter of last year. EU volume, at 61.0 billion, was down by 4.7 per cent, Eastern Europe, Middle East and Africa (EEMA) volume was down by 4.5 per cent to 77.8 billion, Asia volume was down 2.6 per cent to 54.5 billion, while Latin American and Canada volume was increased by 6.0 per cent to 26.0 billion. The company reported that, on an organic basis, which excludes acquisitions, its cigarette shipment volume was down by 4.0 per cent. "However, on a year-to-date basis through September 2009, organic volume was down by 2.1 per cent, which is more in line with PMI's expectations for the full year 2009," the company said. Gains in Latin America and Canada, from the acquisition of Rothmans Inc, were offset by declines in the EU and EEMA regions due to the impact of the economic crisis, primarily in Spain and Ukraine; by unfavorable comparisons due to a strong third quarter in 2008, mainly in the EEMA; and by declines in Asia due to trade inventory movements in Pakistan subsequent to the excise tax increase of June this year. Despite strong growth in Asia, total Marlboro shipments of 76.9 billion were down by 4.3 per cent, primarily due to market declines in the EU and EEMA, largely because of the effects of the economic crisis in Spain and a softening of the premium segment in Russia and Ukraine. Total L&M shipments of 23.4 billion were down by 2.8 per cent, with double-digit growth in the EU offset primarily by a decline in Russia; while total Chesterfield shipments declined by 15.1 per cent, driven by a decrease in shipments in Russia and Ukraine; and total Parliament shipments were down by 4.1 per cent due to declines in the EEMA, partly offset by double-digit growth in Asia. Total Virginia Slims shipments were down by 5.5 per cent, reflecting a decline in the EEMA partly offset by growth in all other regions; while total Lark shipments increased by 9.1 per cent, driven by strong growth in Turkey; and Bond Street shipments increased by 4.3 per cent primarily in Russia. The total shipment volume of other tobacco products (OTP), in cigarette equivalent units, grew by 4.7 per cent, primarily fueled by performances in Canada and the Nordic states. But excluding acquisitions, shipment volume of OTP was down by 9.8 per cent, primarily due to lower volume in Poland, reflecting the impact of the excise tax alignment of pipe tobacco to roll-your-own in the first quarter of 2009. Total shipment volume for cigarettes and OTP was down by 2.8 per cent, and down by 4.1 per cent excluding acquisitions. PMI said its market share performance had improved in a number of markets, including Algeria, Argentina, Belgium, Brazil, Bulgaria, Canada, the Dominican Republic, Egypt, Hungary, Korea, Mexico, Pakistan, the Philippines, Portugal, Russia, Slovakia, Switzerland, Turkey and Ukraine. PMI reported net revenues during the third quarter of $6.6 billion, down by 5.3 per cent on those of the third quarter of 2008 due to unfavorable currency impacts amounting to $846 million. Excluding currency impacts, net revenues increased by 6.9 per cent, primarily driven by favourable pricing of $590 million across all business segments, and the favorable impact of the 2008 Rothmans Inc acquisition, partly offset by unfavorable volume/mix, primarily in the EU and EEMA regions. Excluding currency and acquisitions, net revenues increased by 4.1 per cent. Operating income declined by 1.4 per cent to $2.9 billion. And reported operating companies' income declined by 1.1 per cent to $2.9 billion due to unfavorable currency impacts of $449 million. Excluding currency and the favorable impact of acquisitions of 3.1 percentage points of growth, operating companies' income was up by 11.1 per cent, driven by higher pricing, partly offset by unfavorable volume/mix. Enditem