(RTTNews) – Imperial Tobacco Group Plc (ITYBY.PK: News ,IMT.L: News ) Monday said it expects adjusted operating profits from Spain for the financial year ending September 30 to decline from its previous projections due mainly to price moves in the country.
Imperial Tobacco warned a cigarette price war in Spain would reduce profits from the country
The company sees a 110 million pounds ($178.63 million) reduction in adjusted operating profits from Spain, which includes 40 million pounds related to a one-off non-recurring impact on its logistics business.
“In recent weeks there have been a number of price moves in Spain impacting all market participants. We have acted to protect our market position and the long-term sustainability of our Spanish business and continue to monitor the situation closely,” the company said.
Announcing the first-half results last month, the company had said that cigarette market in Spain declined 18 percent, owing to a weak economy, recent duty increases and the ban on smoking in public places.
The Spanish government increased excise duty in December last year on cigarettes and fine cut tobacco, which was mainly passed on by companies to consumers. The smoking ban, introduced in January, includes restaurant, bars and cafes and is affecting the sector.
The firm said in May that it expects difficult market conditions to persist in Spain and projected a market share of 28.2 percent for the year in Spain, compared to 29.7 percent in 2010.
The company said today that excluding Spain, the anticipated financial performance and position for the financial year ending September 30 remains in line with the Board’s expectations.
IMT.L closed on Friday at 2,085 pence, down 25 pence or 1.18 percent, on 1.79 million shares.
ITYBY.PK settled at $67.56, lower by $1.62 or 2.34 percent, on 29,821 shares.
