* To take 1.2 bln stg writedown on Spanish assets
* Blames country's worsening economic conditions
* Revenue up 13 percent across key brands
* Overall volumes down 2.7 percent
* Shares up 1.5 pct
By Neil Maidment
LONDON, Oct 30 Imperial Tobacco has
taken a 1.2 billion-pound ($1.93 billion) writedown on its
Spanish business as the impoverished country's smokers turn to
cheaper black market cigarettes.
The world's fourth-largest cigarette group, which counts
Davidoff, JPS and Lambert & Butler among its brands, said its
pretax profit halved to 1.1 billion pounds in the year ending
last month, although it raised its dividend by 11 percent to
reflect higher tobacco prices.
Imperial Tobacco bought its Spanish rival Altadis, the maker
of Gauloises and Fortuna cigarettes, for 11 billion pounds in
2007, before the European sovereign debt crisis, which saw Spain
become one of the worst affected countries.
"High unemployment and increasing government austerity
measures are placing further pressures on consumers and the
duty-paid tobacco market, with illicit trade a growing problem,"
the company said in a statement.
Like bigger rivals Philip Morris, British American
Tobacco and Japan Tobacco, Imperial is
expanding into emerging markets to offset the decline in smoking
in many of its mature markets.
"We see significant growth opportunities in our
rest-of-the-world region across Eastern Europe, Africa and the
Middle East and Asia-Pacific and we'll continue to invest to
support sustainable growth," Imperial said in a statement.
The company's net revenue from tobacco rose 4 percent to 7
billion pounds ($11.2 billion). Its four key brands -
premium-priced Davidoff, mid-priced Gauloises Blondes and budget
brands West and JPS - achieved a 7 percent lift in volumes, with
revenues up 13 percent.
Overall combined cigarette and fine-cut tobacco volumes fell
2.7 percent in the year to Sept. 30 because of tough markets in
Poland, Ukraine and compliance with international trade
sanctions against Syria.
"We believe that the company is making good progress but
accept that further evidence may be required to convince the
sceptics," analysts at Panmure Gordon said, retaining a 'buy'
Shares in the group, which sells more than 340 billion
cigarettes a year, closed up 1.6 percent at 23.69 pounds.
The group posted an 8 percent rise in adjusted annual
earnings to 201 pence a share. Its annual dividend rose 11
percent to 105.6 pence a share, boosting its payout ratio to
52.5 percent of earnings.
In the UK and Germany, its two biggest markets, net revenues
rose by 8 and 3 percent respectively thanks to product launches,
while revenue rose 10 percent in its 'rest-of-the-world' region
on healthy demand for its luxury Cuban cigars in Russia and the
Middle East, and a strong performance in Asia Pacific.
Revenue in the Americas, where the United States is its
primary market, fell 11.4 percent, but the group said it had
seen improvements during the second half of the year.