The Golden Virginia manufacturer revealed a fall in profits and revenues but said it was buoyed by higher tobacco prices over the past half year
Imperial Brands’ shares have increased following an announcement of increased tobacco prices despite a dip in profits and revenues.
The Golden Virginia maker’s stock value climbed on Wednesday morning as the firm reassured investors it’s on track to meet its annual targets. Chief Executive Stefan Bomhard highlighted the “strongest organic top-line growth in more than ten years, amid a challenging external environment”.
Tobacco companies have faced challenges due to a general decline in traditional cigarette smoking, especially in key Western markets. The company reported a 6.3% drop in tobacco volume sales for the six months leading up to March 31, compared to the previous year.
However, this was somewhat balanced by an 8.6% hike in tobacco pricing during the same timeframe. Imperial’s next generation product (NGP) division, which encompasses heated tobacco and vape products, experienced robust growth in the first half of the year.
With a 16.8% increase in net revenues, the NGP sector has been thriving, thanks to innovative products and significant expansion across Europe. Despite these positive aspects, Imperial noted a 2.3% decrease in total revenues to £15.06billion, attributing the decline to the current exchange rates.
Mr Bomhard said: “Investment in consumer capabilities, more agile ways of working and further progress with our performance culture have made Imperial Brands a stronger business better able to deliver an acceleration in financial delivery. Pricing actions in tobacco taken in the first half and good momentum in NGP gives us confidence in our ability to deliver full-year results in line with our guidance.” Shares were up by 4.6% following the morning trading session.