Discount Cigarettes News
Nov 16th, 2007 - 10:13:36
Net income climbed to 387 million euros ($566 million), or 1.53 euros a share, from 339.1 million euros, or 1.30 euros, a year earlier, the Madrid-based company said today in a filing. That fell short of the 393 million-euro median estimate of four analysts surveyed by Bloomberg. Altadis raised the price of Fortuna cigarettes by 9 percent to 2.40 euros a pack over the past year as mergers cut the number of tobacco companies, giving those that remain leverage to charge more. Imperial is spending 12.6 billion euros to buy the company as combinations take place across the industry in response to government bans on smoking and increases in tobacco taxes. Altadis is ``improving the Spanish cigarette results, and also the cigar business,'' Fernando Garcia, an analyst at Espirito Santo in Madrid with a ``buy'' recommendation on the stock, said before the figures were released. ``The company continues to generate strong cash flows.'' Sales rose 2.7 percent to 3 billion euros, said Altadis, the maker of Gauloises cigarettes and largest manufacturer of cigars in the world. The company maintained its August forecast for ``solid'' second-half growth excluding acquisitions and currency movements. Operating income ``was fully in line with management's expectations and confirmed the good results of the first part of the year,'' the statement said. Earnings confirmed ``the recovery in the U.S. cigar business and tobacco logistics in Spain.'' Bid Value Altadis shares rose 8 cents, or 0.2 percent, to 49.42 euros in Madrid yesterday. Imperial's bid values them at 50 euros each, more than triple the price when the former French and Spanish tobacco monopolies merged to form Altadis in 1999. Western European governments from Norway to Italy have barred public smoking and raised taxes on tobacco to promote health, prompting cigarette makers based in the region to expand elsewhere. Buying Altadis would increase Bristol, England-based Imperial's scale in Russia, Europe's largest cigarette market. French and Spanish smokers generate most of sales at Altadis, adding to its allure for Imperial, whose main U.K. and German markets are shrinking. Fortuna controls about 13 percent of the market for cigarettes made from ``blonde'' blended tobacco in Spain, where competitors include British American Tobacco Plc's Pall Mall and Lucky Strike brands. The Spanish market is ``ripe'' for further price increases, BAT Chief Executive Officer Paul Adams said Nov. 1. Blonde Cigarettes Spain's blonde-cigarette market expanded by 1.3 percent by volume in the first half, rebounding after public smoking was restricted last year. The market swelled by 1.2 percent in France, overcoming the imposition of a smoking ban in February. Imperial made its offer in July after Altadis had rejected bid proposals worth 45 euros and 47 euros a share. It's paying the same amount offered in May by buyout firms CVC Capital Partners Ltd. and PAI Partners, the trigger for a four-month takeover battle. The number of tobacco-industry bid targets has shrunk since Japan Tobacco Inc. agreed last year to pay 7.5 billion pounds for Gallaher Group Plc. In addition to buying Altadis, Imperial in February agreed to buy Commonwealth Brands for $1.9 billion to expand into the U.S. market. Altadis shareholders have until Jan. 11 to accept the bid. © Copyright 2006 by DiscountCigarettesBox.Com Top of Page |
