KUALA LUMPUR: Tobacco company JT International Bhd (JTI) saw net profit for 3QFY11 ended Sept 30 increased 13.1% year-on-year (y-o-y) to RM39.8 million or 15.2 sen a share, from RM35.1 million reported in the previous year’s corresponding quarter.
Revenue for the third quarter likewise rose to RM334.9 million from RM315.9 million previously.
According to the notes accompanying the announcement, the increase in revenue was attributed primarily to higher cigarette prices, offset partially by lower sales volume. Legal tobacco industry volume fell by 3% in the first nine months of this year, according to data by the Confederation of Malaysian Tobacco Manufacturers (CMTM).
On a cumulative basis however, JTI’s net profit declined slightly to RM104.7 million or 40.05 sen a share, compared with RM106.5 million reported in 9MFY10.
This was despite revenue for the period increasing to RM932.2 million from RM927.6 million.
“Profit before tax [for 9M] was marginally lower at RM140.6 million compared with RM142.9 million for the corresponding period in 2010. The drop was attributed to lower sales volume offset partially by higher net margins and lower marketing expenditure,” said JTI.
The tobacco players got a respite this year when they were spared an increase in excise tax when the government unveiled its budget for the upcoming year.
Local tobacco players have been open about how the steep hikes in excise duties contribute to the increase in illicit cigarette activity.
In a study commissioned by CMTM, illicit cigarette trade in Malaysia has increased to 37.3% from March to May 2011, compared with an average of 36.3% in 2010.
“Amid the challenging environment, JTI managed to maintain its market share at 19.8% in the first nine months of 2011, compared with 19.7% during the same period last year,” said JTI in a statement.
Despite managing to maintain its market share, JTI is cautious on its prospects going forward, saying, “JTI is committed to maintain its competitiveness through continued effective investment behind its flagship brands. However, it is very unlikely that the company will be able to maintain last year’s strong performance.”
For 9MFY11, dividends proposed/declared by JTI were at 30 sen per share, same as last year’s corresponding period.
This article appeared in The Edge Financial Daily, November 22, 2011.
Revenue for the third quarter likewise rose to RM334.9 million from RM315.9 million previously.
According to the notes accompanying the announcement, the increase in revenue was attributed primarily to higher cigarette prices, offset partially by lower sales volume. Legal tobacco industry volume fell by 3% in the first nine months of this year, according to data by the Confederation of Malaysian Tobacco Manufacturers (CMTM).
On a cumulative basis however, JTI’s net profit declined slightly to RM104.7 million or 40.05 sen a share, compared with RM106.5 million reported in 9MFY10.
This was despite revenue for the period increasing to RM932.2 million from RM927.6 million.
“Profit before tax [for 9M] was marginally lower at RM140.6 million compared with RM142.9 million for the corresponding period in 2010. The drop was attributed to lower sales volume offset partially by higher net margins and lower marketing expenditure,” said JTI.
The tobacco players got a respite this year when they were spared an increase in excise tax when the government unveiled its budget for the upcoming year.
Local tobacco players have been open about how the steep hikes in excise duties contribute to the increase in illicit cigarette activity.
In a study commissioned by CMTM, illicit cigarette trade in Malaysia has increased to 37.3% from March to May 2011, compared with an average of 36.3% in 2010.
“Amid the challenging environment, JTI managed to maintain its market share at 19.8% in the first nine months of 2011, compared with 19.7% during the same period last year,” said JTI in a statement.
Despite managing to maintain its market share, JTI is cautious on its prospects going forward, saying, “JTI is committed to maintain its competitiveness through continued effective investment behind its flagship brands. However, it is very unlikely that the company will be able to maintain last year’s strong performance.”
For 9MFY11, dividends proposed/declared by JTI were at 30 sen per share, same as last year’s corresponding period.
This article appeared in The Edge Financial Daily, November 22, 2011.
