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)