Philip Morris International's cigarette shipment volume during the second quarter, at 241.0 billion, was increased by 8.0 per cent on that of the second quarter of 2009.
However, on an organic basis, which excludes acquisitions, the company's volume, flattered by an inventory impact in Japan, was up by 0.3 per cent.
![]()
In the company's EEMA (Eastern Europe, Middle East and Africa) region, a volume growth of 1.6 per cent was driven by Russia, Ukraine, the Middle East and double-digit growth in North Africa, partly offset by a decline in Turkey of 19.3 per cent caused by the impact of a significant excise increase in January 2010.
In Asia, cigarette shipment volume increased by 34.9 per cent, primarily reflecting a higher distributor inventory in Japan of about 3.4 billion units in anticipation of increased trade and consumer purchases ahead of an announced tax increase on October 1. PMI recorded double-digit growth in Korea and benefited from a 17.2 billion unit favorable impact of the PMFTC [Philip Morris and Fortune Tobacco] business combination in the Philippines. These gains were partly offset by a decline in Pakistan, mainly due to a surge in the availability of illicit cigarettes.
In Latin America & Canada, cigarette shipment volume increased by 0.9 per cent, driven mainly by double-digit growth in Canada, which was fueled by an improvement in the tax-paid market as a result of continuing anti-contraband enforcement measures.
The gains in the EEMA, Asia and the Americas more than offset declines in the EU, which were primarily due to a lower total cigarette market and share in Germany; the impact of excise tax and VAT-driven price increases in the first half of 2010 in Greece; and the economic downturn in Spain.
Total cigarette shipments of Marlboro, at 77.9 billion, were down by 0.5 per cent, due primarily to decreases in the EU and, to a lesser degree, in Latin America & Canada. Marlboro shipments grew slightly in the EEMA region, primarily driven by Ukraine, the Middle East and North Africa, but partly offset by Russia and Turkey. They grew strongly in Asia, primarily reflecting the favorable distributor inventory impact in Japan, growth in the Philippines, and double-digit growth in Korea.
Cigarette shipments of L&M, at 23.2 billion, were essentially flat, with shipment growth in all regions except the EEMA region, primarily due to declines in Russia, Turkey and Ukraine, partially offset by double digit growth in Algeria and Egypt.
Driven by a double-digit increase in shipments in Russia and Ukraine, cigarette shipments of Chesterfield, at 10.3 billion, grew by 6.2 per cent.
Cigarette shipments of Parliament, at 9.9 billion, were up by 2.3 per cent, led by growth in Japan, Korea and Russia, partly offset by Turkey; shipments of Lark, at 9.2 billion, increased by 16.2 per cent, driven by growth in Japan and Turkey; and shipments of Bond Street, at 12.3 billion, were up by 16.4 per cent, driven by double-digit growth in Russia and Ukraine, partly offset by Turkey.
Total shipment volume of other tobacco products (OTP), in cigarette equivalent units, grew by 55.0 per cent, fueled by the acquisition of Swedish Match South Africa. Excluding acquisitions, the volume of OTP was down by 2.8 per cent, primarily due to lower volume in Poland, reflecting the impact of an excise tax alignment of pipe tobacco with roll-your-own in the first quarter of last year.
PMI's total shipment volume for cigarettes and OTP was up by 8.8 per cent, or up by 0.2 per cent excluding acquisitions.
During the second quarter, reported net revenues, excluding excise taxes, were up by 15.1 per cent, while, excluding the effects of currency changes, reported net revenues, excluding excise taxes, increased by 8.3 per cent.
Reported operating companies' income was up by 19.5 per cent, while, excluding currency, reported operating companies' income was up by 15.0 per cent.
Reported diluted earnings per share, at $1.07, were up by 35.4 per cent, while excluding the effects of currency changes, reported diluted earnings per share were increased by 31.6 per cent.
Adjusted diluted earnings per share, at $1.00, were up by 20.5 per cent, while, excluding the effects of currency changes, adjusted diluted earnings per share were up by 16.9 per cent.
"Though partially flattered by a timing favorability in Japan, we posted a strong quarter across all key metrics, confirming our sustained business momentum," said Louis Camilleri, chairman and CEO.
"The widespread sequential improvement in Marlboro's market share underscores our momentum and provides further evidence that our brand architecture initiatives are working.
"Our broad geographic footprint continues to serve us well, enabling us to deal with weakness arising in markets where economic recovery remains subdued." Enditem
