PMI's Cigarette Volumes Increased

Source from:  Tobacco Reporter 04/27/2011

Philip Morris International's cigarette shipment volume during the first quarter of 2011, at 207.920 billion, was up by 1.6 per cent on that of the first quarter of last year, though, on an organic basis, which excludes acquisitions, the company's volume was down by 3.3 per cent. Volume in its Asia region was up by 14 per cent to 72.092 billion, primarily driven by growth in Indonesia and the favorable impact of the company's business combination in the Philippines. This growth was partially offset in Japan, where the overall market was down, and in Pakistan, where the illicit trade cut into the tax-paid market. In the company's EEMA (Eastern Europe, Middle East and Africa) region, volume declined by 0.8 per cent to 63.643 billion, primarily due to political unrest in Egypt, Libya and Tunisia, and to tax-driven price increases in Serbia and Ukraine, partly offset by growth in Algeria, Romania and Turkey. PMI's volume was down by 5.5 per cent to 23.663 billion in its Latin America and Canada region, mainly reflecting Mexico's overall lower market and the depletion of trade inventories established ahead of a significant January 1 excise tax increase, partly offset by growth in Argentina and Brazil. Volume in its EU region was down by 7.3 per cent to 48.552 billion, primarily because of generally lower total markets, notably in Greece, Poland and Spain, unfavorable distributor inventory movements in Italy, and lower market share, mainly in Poland and Spain. Marlboro shipments of 68.6 billion were down by 2.9 per cent, due primarily to a 6.5 per cent decrease in the EU, mainly reflecting a lower total market in Greece and Spain, and to an 8.2 per cent decrease in Latin America & Canada, due to the impact of the January 1 excise tax increase in Mexico. These declines were partially offset by a 1.1 per cent growth in the EEMA region, primarily due to strong share growth in Algeria and Egypt, and a bigger total market in Romania where the illicit trade was reduced; and by an 0.7 per cent increase in Asia, primarily reflecting growth in Korea and the Philippines, offset by a fall in Japan following a significant tax increase in October 2010. L&M shipments of 20.4 billion were up by 1.5 per cent; Chesterfield shipments of 8.0 billion were down by 0.4 per cent; Parliament shipments of 8.4 billion were up by 9.0 per cent; Lark shipments of 6.5 billion were down by 5.9 per cent; and Bond Street shipments of 9.5 billion were increased by 2.3 per cent. PMI's shipment volume of other tobacco products (OTP), in cigarette equivalent units, excluding acquisitions, grew by 0.5 per cent, while the total volume of cigarettes and OTP was up by 1.5 per cent; or down by 3.2 per cent excluding acquisitions. PMI's market share performance was said to be stable, or to have registered growth, in a number of key markets, including Algeria, Australia, Belgium, Brazil, Egypt, France, Germany, Greece, Hong Kong, Indonesia, Japan, Korea, Mexico, the Netherlands, the Philippines, Singapore, Thailand and Turkey. PMI, which announced during the first quarter an agreement to acquire the cigarette manufacturing assets and trademarks of International Tobacco & Cigarettes Co. Ltd. (ITCC) in Jordan, said that its reported and adjusted diluted earnings per share, at $1.06, were up by 17.8 per cent on those of the first quarter of 2010; or by 14.4 per cent, excluding the effects of currency factors. Reported net revenues, excluding excise taxes, were up by 4.5 per cent to $6.8 billion; or by 4.3 per cent, excluding currency factors. Reported operating companies' income was up by 10.8 per cent to $3.1 billion; or by 8.3 per cent excluding currency factors. Adjusted operating companies' income was up by 11.4 per cent to $3.1 billion; or by 8.8 per cent excluding currency factors. Operating income was up by 10.8 per cent to $3.0 billion. "We start the year on a strong footing, despite the tragic events in Japan and the upheavals in North Africa," said Louis C. Camilleri, chairman and CEO. "Our organic volume performance was slightly higher than we had originally forecast given the anticipated weakness in Mexico, Japan, Spain, Ukraine and Pakistan. "Our momentum is such that we are raising our EPS guidance for the year driven, in equal part, by a stronger organic earnings projection and favorable currency at prevailing rates. "Our revised guidance anticipates higher spending in support of our brand portfolio and a more conservative pricing stance in response to competitive actions. "We are pleased with our financial performance to date and look forward to another year of solid results." Enditem