Imperial Tobacco Group Plc, Europe’s biggest tobacco company, forecast a drop in first-half cigarette volumes because of weak demand in parts of eastern Europe, the U.S. and Spain.
Selling quantities for the six-month period ending March 31 will decline by about 4 percent, also hurt by disruption to supply networks in the Middle East, the Bristol, England-based company said today in a statement. Volumes will stabilize in the second half, according to the statement.
Last month, Imperial Tobacco said cigarette volumes for the fiscal year ending September would slide 2 percent. The maker of the Fortuna brand, acquired in the 2008 takeover of Altadis, raised prices for most brands in Spain by 15 percent per pack last year as selling quantities in the country fell 10 percent.
Business conditions haven’t changed since the company’s last update at the beginning of February, Imperial Tobacco said today. The company’s fine cut tobacco businesses, such as Gold Leaf and Golden Virginia Yellow in the U.K. and Drum and Van Nelle in Germany, will post first-half volume growth of about 10 percent, according to the statement.
Imperial Tobacco rose 16 pence, or 0.8 percent, to 2,066 pence at 10 a.m. in London trading, valuing the maker of West, Davidoff and JPS cigarettes at 21 billion pounds ($32 billion).
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