Philip Morris shipments to Russia decline 0.4% in Q3, market share rises
MOSCOW. Oct 16 (Interfax) - Philip Morris International Inc (PMI) reduced cigarette shipments to Russia to 23 billion units in the third quarter of 2014, down 0.4% year-on-year, but substantially outperforming the overall Russian market.
In Russia, the estimated total cigarette market declined by 10.2% to 83.5 billion units, mainly due to the unfavorable impact of the tax-driven price increases and the prevalence of illicit trade, PMI said in a press release.
The Russian market contracted 9.4% through the first nine months of the year and is expected to contract 9%-10% for the full year.
PMI's August quarter-to-date market share of 27.4%, as measured by Nielsen, was up by 1.3 percentage points, the press release says. Market share rose for the Parliament, L&M and Bond Street brands, by 0.4 p.p., 0.2 p.p. and 1.4 p.p. to 3.8%, 3.1% and 7.7% respectively, but declined 0.2 p.p. for Marlboro and Chesterfield to 1.5% and 2.8% respectively.
PMI shipped 222.3 billion cigarettes overall in the third quarter, 0.4% less year-on-year (adjusted for the effect of acquisitions). Net revenue excluding excises fell 0.9% to $7.9 billion. The operating profit was down 7.1% to $3.3 billion.
In Russia, PMI has tobacco plants in Leningrad region and Krasnodar territory, as well as Philip Morris Sales and Marketing, which engages in cigarette distribution in 100 Russian cities through a network of affiliates. The two tobacco plants have capacity to produce 100 billion cigarettes a year. PMI and affiliated companies have invested over $1 billion in Russia.
