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Altria cigarette volume takes a hammering

02 Aug 2018. Altria, the country’s largest cigarette maker and owner of Philip Morris USA, reported a 7.6 per cent decline in shipments of smokeable products for the six-month period ended 30 June, with Marlboro shipments down 7.2 per cent, the company said reporting its halt-yearly results.

Altria companies shipped 54.788 billion cigarettes in the period, down 7.6 per cent on the 59.269 billion shipped in the first half of 2017. Marlboro shipments, at 47.182 billion, were down 7.2 per cent on the 50.852 billion sticks shipped in the first half of 2017. In the second quarter, Marlboro volume was down 10 per cent and total cigarette shipments were down 10.8 per cent. In the cigars category, Altria companies shipped 795 million sticks in the six month period, an increase of 2.8 per cent.

The company said shipments volumes for cigarettes and cigars, when adjusted for trade and inventory movements, declined an estimated 5.5 per cent in the first half and attributed the volume losses to industry decline, inventory movements and retail share losses.

In the six-month period, revenues net of excise taxes for the smokeable products segment were down 2.3 per cent, at USD 8.171 billion (EUR 6.998 billion). For the second quarter, Altria reported a 4.8 per cent drop in revenues net of excise taxes from the smokeable segment, at USD 4.158 billion.

In the smokeless segment, total shipments were down 1.3 per cent in the six-month period, with shipments of the Copenhagen brand up 0.2 per cent at 262.5 million cans and packs. Shipments of the Skoal brand declined 5.4 per cent. Net of excise taxes, revenues from smokeless sales increased 7.5 per cent in the six months to reach USD 1.038 billion.

Altria said industry volumes for smokeless tobacco dipped around 1 per cent in the six-month period, and estimated total domestic cigarette volumes fell 3.5 per cent compared to the same period in 2017.

In the Next Generation Products segment, Altria said volumes of its Nu Mark e-vapour brands increased by 16 per cent in the second quarter, with the MarkTen Elite brand present in over 23,000 retail stores. Altria’s smokeless company, USSTC, had submitted premarket tobacco product application to the US Food and Drug Administration for its new Verve Disks and Verve Chews, Altria said.

Howard Willard, chairman and chief executive officer of the Richmond-based company, said, “Our core tobacco businesses performed well as they continued to make strategic investments in support of their long-term objectives.”