By John Lee.
Imperial Tobacco Group, Europe’s second-biggest tobacco company, has reported that its revenues and profits for the nine months to the end of June were reduced by difficulties with its Iraq business.
In a statement to the markets, the company said:
“Underlying tobacco net revenue was flat but grew 1 per cent excluding the impact in Iraq … Growth Market net revenue was down 1 per cent, held back by Iraq which masked growth of 3 per cent in the rest of the Division …
“Underlying volumes were down 6 per cent, impacted by the political and security situation in Iraq which continues to deteriorate. Excluding this impact, underlying volumes were down 4 per cent, slightly better than industry volumes in our footprint which were down 4.5 per cent.”
Philip Gorham, an analyst at Morningstar, told Bloomberg that as Iraq is a small market for Imperial, the business there “must have been obliterated … Distribution has become very difficult, while other products are coming in from Turkey and other places.”
The company’s brands include Gauloises, Gitanes, Davidoff and Rizla.
(Sources: Imperial Tobacco, Bloomberg Business)
(Tobacco image via Shutterstock)