Imperial Brands Net Profit Falls -- Update

By Saabira Chaudhuri 

LONDON-- Imperial Brands PLC reported a 66% fall in first-half profit, weighed down by restructuring and other costs though the cigarette maker's revenue climbed higher.

Imperial, which makes the JPS and Gauloises brands, said net profit fell to GBP290 million ($421.5 million) in the six months ended March 31 from GBP853 million in the same period last year.

On an adjusted basis--a measure which strips out one-off costs--profit rose to GBP1 billion from GBP959 million. Revenue rose 5.6% to GBP12.81 billion.

Total tobacco volume fell 3.1% in the period to 133.9 billion sticks, a deterioration from the 1% decline in the year-earlier period.

Imperial said it is on track to meet full-year expectations and that Iraq and Syria, two markets that have dragged on results, should no longer have a significant impact on performance in the second half.

The company reported restructuring costs more than doubled to GBP119 million while amortization charges climbed to GBP387 million from GBP243 million as it continued to cut costs and integrate its U.S. acquisition.

Imperial Brands last June closed its acquisition of a number of cigarette brands, including Winston, Kool, Salem and electronic cigarette brand Blu from Reynolds American Inc. (RAI) and Lorillard Inc. for $7.1 billion. The deal catapulted Imperial into the position of third-largest player in the U.S. tobacco market.

Wednesday, the company reported U.S. first-half revenue had risen to GBP711 million from GBP185 million with volumes of about 8.6 billion sticks.

Write to Saabira Chaudhuri at [e-mail]

(END) Dow Jones Newswires

May 04, 2016 03:00 ET (07:00 GMT)

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