Philip Morris CR sees net profit fall by 9.7 pct to Kc1.7bn in H1

Kutna Hora, Central Bohemia, Sept 29 (CTK) - Philip Morris CR, Czechia's leading manufacturer and seller of tobacco products, saw its net profit fall by 9.7 percent yr/yr to Kc1.7bn in H1, while sales excluding excise duty and VAT decreased by 1 percent to Kc9.7bn, the company said on its website today.

Total sales of tobacco products in the Czech Republic and Slovakia fell by 10.3 percent yr/yr in the first half of the year, the company said.

"As we expected, our financial results in 2023 are significantly affected by a multiple increase in energy costs and persisting global inflationary pressures," said Philip Morris CR CEO Andrea Gontkovicova in a press release.

"Considering macro-economic factors and the consumer price index, at the beginning of the second quarter we also appropriately adjusted salaries across our entire employee base," she said.

The company is observing a continuing downward trend in cigarette sales driven by a significant drop in sales in border areas. The change is also related to the gradual transition of smokers from traditional cigarettes to smoke-free alternatives, according to the company.

The total number of users of IQOS smoke-free products in the Czech Republic and Slovakia increased to more than 940,000 in the first half of the year, of which approximately 680,000 users switched exclusively to IQOS, the company said.

The total combined market of cigarettes and heated tobacco products decreased by an estimated 9.8 percent compared to H1 2022 to 7.7 billion units in the Czech Republic and by an estimated 5.5 percent to 3.4 billion units in Slovakia.

Philip Morris remains the market leader in both markets with an estimated market share of 39.6 percent in Czechia and 53.7 percent in Slovakia.

In terms of business activities, the most significant event for the company in the first half of the year was the consolidation of its traditional cigarette portfolio and its entry into the disposable e-cigarette market.

Philip Morris CR employs over 1,100 people. The company's shares are traded on the Prague Stock Exchange (BCPP). It also holds a 99 percent stake in Philip Morris Slovakia.

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