Philip Morris CR's net profit falls by 13.3 pct to Kc1.6bn in H1

Kutna Hora, Central Bohemia, Sept 30 (CTK) - Philip Morris CR, Czechia's leading manufacturer and seller of tobacco products, saw its net profit fall by 13.3 percent year-on-year to Kc1.6bn in the first half of this year, with sales excluding excise duty and VAT rising by 2.9 percent to Kc10.7bn, the company said today.

The company's total sales of nicotine products in the Czech Republic and Slovakia fell by 4.6 percent to 4.6 billion units, which the company attributes to a steady decline in consumer demand for traditional cigarettes. The decline in cigarette sales was partially offset by an increase in sales of smoke-free products. Their sales increased by 100 million units year-on-year.

"Our half-year financial and economic results confirm the continuous shift of Czech and Slovak consumers away from traditional cigarettes. We continue to innovate our portfolio of smoke-free products and offer our adult customers a wide range of alternatives with reduced or potentially reduced health risks," said company head Fabio Costa, citing the launch of nicotine pouches on the Czech market in early January and the spring launch of an innovative version of a tobacco heating device as examples.

The year-on-year increase in total consolidated sales was mainly due to favourable price developments across the portfolio of traditional and smoke-free products and growth in sales of smoke-free alternatives. According to the company, the decline in profit reflects the impact of lower sales volumes and targeted investments aimed at strengthening long-term performance.

The company has recently announced that it will double its investment in the Kutna Hora plant, intended for the launch of nicotine pouch production, to more than Kc2bn. The originally planned production capacity for nicotine pouches will more than double, creating up to 150 new jobs. Nicotine pouches are expected to begin commercial production in Kutna Hora early next year. The company will manufacture them alongside its current tobacco products.

The total combined market for cigarettes and heated tobacco products in Czechia fell by an estimated 3.9 percent to 6.7 billion units compared to the first half of last year. The market in Slovakia also declined, by an estimated 3.6 percent to a total of 3.3 billion units.

Philip Morris remains the leader in both markets with an estimated market share of 39.8 percent in the Czech Republic and 50.3 percent in Slovakia. It employs over 1,100 people. The company's shares are traded on the Prague Stock Exchange.

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