Scandinavian Tobacco Group (STG) said sales in the second half of 2016 should improve as markets normalise after introduction of revised European rules for tobacco products in May.

Organic sales dipped 1.5 per cent in the second quarter and operating profit (EBITDA) fell 2.7 per cent. “Our second quarter, in particular, was impacted by EU’s Tobacco Products Directive (TPD). The late adoption of the directive into national legislation has created short-term fluctuations in the markets and in our production. Noise in the markets is foreseen to continue in the third quarter,” said STG Chief Executive Niels Frederiksen.
Half year sales and EBITDA (earnings before interest, tax, depreciation and amortisation) were nearly unchanged at respectively DKK 3.2 billion (EUR 430 million) and DKK 632 million. STG is a leading manufacturer of cigars and pipe tobaccos. Price increases, normalisation of currency fluctuations and, in TPD markets, of stock movements should increase sales growth in the second half, the company said.