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Swedish Match's profits up

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10:44 CEST+02:00
Tobacco giant Swedish Match said on Thursday second quarter pretax profits went up 39 percent to 880 million kronor due to increased profitability in its lights – matches and lighters – and its cigar division.

Sales fell 4 percent to 3.42 billion kronor, but excluding divested businesses and in local currencies, sales rose 2 pct with increases in three of the five product areas.

The strongest sales growth occurred in moist snuff (snus) and chewing tobacco, where sales went up 4 percent for both, and 6 percent for cigars.

Operating margins improved for three of the five product areas.

Snus saw its operating profits fall 2 percent to 381 million kronor, while operating margins worsened to 45.9 percent from 48.5 percent, due to increased costs for product launches, Swedish Match said.

Market expectations were for a margin of 47.5 pct. The company said volumes rose 1.2 percent in Scandinavia and 13.8 pct in the US.

Operating profits at cigars rose 81 percent to 202 million, with operating margins improving to 22.7 percent from 13.3 percent. But adjusting for restructuring costs last year, operating profits rose 8 percent.

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