Imperial Tobacco, the maker of Gauloises cigarettes, told that company’s annual net income increased by 57% that is in part boosted by a major cost-cutting drive. Profits after taxation increased to $2.27 billion in the twelve months to September. For example, last year in the same period of time the company;s profits were $1.44 billion.
Investors said they like the results. Imperial shares were up 2.70% to 2,739 pence in morning deals on London’s FTSE 100 index, which was up 0.22% at 6,502.35 points.
However, revenues of the tobacco company dropped 5.8% to $4.2 billion. The company says that a lot depends on the Russian market, one of largest markets of the company. Russia is going to increase taxes on cigarettes and introduce strict tobacco regulations and this may affect company’s overall business.
Annual volume of cigarettes dropped 7% to 294 billion sticks due to reducton of demand in the USA.
In spite of this, company’s chief executive Alison Cooper says that 2014 is the year of great delivery by Imperial. The finished their stock optimisation programme and realised over $90 million of further savings through their cost optimisation programme. Generally, they are happy that managed to create a strong business.
By 2018 the tobacco company plans to deliver $400 million of savings per year.
However, Cooper says that trading conditions for tobacco companies become quite difficult in may countries worldwide, and in these conditions Imperial Tobacco puts its efforts to strenghten its business. In future they intend to buy some brands from Lorrilard and Reynolds American, which will help to transform their business in the USA.