Imperial Tobacco Group Plc (IMT.L, ITY, ITYBF.PK), the world's fourth-largest maker of cigarettes, said Thursday that overall performance of the expanded group, which includes Altadis, has remained in line with expectations and that the group was on track to report another successful year.
Providing a trading update for the nine months to June 30, Imperial stated that cigarette volumes for the enlarged group grew by 45% to 207 billion from 143 billion last year. On an adjusted basis, volumes were up 3% at 147 billion. Adjustments were made for the contributions from Commonwealth brands till March end, Altadis' share since acquisition to June end, and the planned destocking in Taiwan and Russia.
In the trading update, the Bristol, U.K.-based Company noted that it increased its share and volumes in many markets. For cigarettes, the brands of Davidoff, Gauloises Blondes, and JPS were the key growth drivers, which was complemented by healthy performances from its enhanced portfolio of cigar and fine cut tobacco products. The company's purchase of Altadis has given it brands like Gauloises and Fortuna to add to its own West and Davidoff.
Noting that the company continued to operate in a continuing challenging environment, the company said that the cigarette market in U.K., Germany, and in many parts of Europe continue to be partly hit by the implementation of smoking restrictions. The U.S. market is estimated to return to normalcy as the impact of the reversal of the 2006 trade stock build reduces. It also continues to see U.S. fine cut tobacco market volumes to grow about 10% annually. For the rest of the world, underlying volume growth excluding Altadis was 4%, and adjusting for destocking 5%.
The smoking bans in many places have also continued to impact cigar volumes in U.S. and Europe. The economic slowdown, particularly in the premium segment, too had its impact. Despite these negative factors, Imperial reported that many of its leading brands continued to gain volume in these markets.
According to the company, its tobacco logistics business gained from effective cost controls, increase in the price of cigarettes in Italy, and rising tobacco volumes in Spain and Morocco, whereas many of the trends from last year have continued within its non-tobacco logistics section.
In addition, the company reported that the integration of Altadis, the Franco-Spanish rival that it acquired for 15.2 billion euros in January, is proceeding in line as planned. The consultation process on its European restructuring proposals is also progressing as expected.
Imperial said it will record a reduction of around 24 million euros on its operating profit for the full year, following the close of the sale of a number of brands to Philip Morris International, Inc. (PM). On June 30, Imperial sold the brands to Philip Morris for 254 million euros in cash.
Further, Imperial said it realized 358 million euros at June end, which is related to the program of non-core asset disposals of 650 million euros as previously announced by Altadis last April. Assuring that the financial position of the Group continues as expected, Imperial said that Rights Issue has enabled the company to reduce it debt level to just under GBP 12 billion at June 30.
In a separate release, Imperial announced that its plans to voluntarily delist its American Depositary Receipts or ADRs from the New York Stock Exchange and terminate its reporting obligations under the Securities Exchange Act in September 2008. It will also deregister and terminate its reporting obligations for its $600 million Guaranteed Notes. The company, however, confirmed that the termination would have no impact on the terms and conditions of these notes, due April 1, 2009.
Imperial also revealed that it intends to maintain its ADR facility as a Level I program, enabling investors to retain their ADRs and be traded on the over-the-counter market in the USA.
Bob Dyrbus, group finance director, said, "Over the last year our average ADR trading volume has been less than five percent of the total trading volume of our shares and therefore from a cost and administrative perspective it is no longer appropriate to continue with the reporting obligations under the Exchange Act."
Imperial will provide a pre-close update in September 2008.
IMT.L is currently trading on LSE at 1,801.00 pence, up 33.00 pence, or 1.87%, with a volume of 2.45 million shares.
ITY closed Wednesday's regular trading on NYSE at $70.95, up $0.70, on a volume of 48,400 shares.
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December 19, 2025 15:10 ET U.S. inflation data and interest rate decisions by major central banks were the highlights of this busy week for economics news flow. Employment data and survey results on the housing markets also gained attention in the U.S. In Europe, the European Central Bank and Bank of England announced their policy decisions and macroeconomic projections.