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Philip Morris ČR profits dip in H1 thanks to currency losses

Total cigarette market nears 10 billion units in the first half of 2016.


PRAGUE – Profits from the largest manufacturer of cigarettes in the Czech Republic, international conglomerate Philip Morris reached 1.6 billion Kč in the first half of 2016, down 1 percent compared to the same period last year, according to a company financial statement released last week.

The drop in take-home earnings resulted from lower forex gains from the Czech Koruna, which has steadily gained on the greenback to the tune of 2.04 percent from 24.89 Kč to 24.38 Kč between January 1 and June 30.

Aside from uncontrollable market factors, the company boasted about its solid performance with consolidated revenues, net of excise tax and VAT, hitting 5.4 billion Kč in the first half of 2016, an increase by 5.7 percent compared to this time in 2015. This was “primarily due to favorable volume/mix in the Czech Republic and Slovakia, as well as higher manufacturing services. Excluding the impact of currency, consolidated revenues, net of excise tax and VAT, increased by 6.1 percent.”

At the same time, the total cigarette market in the Czech Republic increased by an estimated 4.2% in the first half of 2016 versus the same period in 2015 to 9.9 billion units, mainly due to continuous solid economic environment, the report states.

“According to the retail audit research conducted by the Nielsen Company (Europe) Sárl, the cigarette market share of Philip Morris ČR a.s. declined by 0.6 share points from 46.4% in the first half of 2015 to 45.8%2 in the same period in 2016, mainly reflecting the continued share declines of local brands, partially offset by higher shares for Marlboro, L&M and Philip Morris,” it continued.

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