Imperial Brands warned that sales of bape and similar products had fallen over the past year, offsetting the small increase in tobacco revenue as smokers spent more on cigarettes during the pandemic.
The UK tobacco group said sales of its Blu vaping device and “damage-reduced” products fell by 28 per cent to € 201 million as of September.
Imperial has blamed the ban on some flavorful bape in the U.S. on its guilt and concerns about its impact on health after several deaths related to inhaling unregulated liquid cannabis.
Oliver Tant, chief financial officer, said the Imperial had entered the year to increase vaping sales and sell “a lot of stock to sellers.”
“That request was not really fulfilled,” Tant added. The company did not sell more stock to oversupply vendors and forced some to return flavored products, which the U.S. government banned this year in a bid to prevent widespread use among teens.
Demand for evaporation fell in the second half of the year. However, cigarette sales were boosted as consumers spent less money in restaurants and bars during the pandemic.
Total net income remained flat, mainly at € 7,991 million, and adjusted operating income fell by 5 per cent to € 3.5 billion.
He has made efforts to keep up with Imperial rivals, as the focus in the tobacco industry shifts from traditional cigarettes to alternatives such as steam and electronic cigarettes. The company has written twice this year the value of the so-called new generation product portfolio, for a total of £ 124 million.
The new CEO of Imperial, Stefan Bomhard, who took over the company four months ago, said there was a complete update on the vaping and tobacco strategy for January.
Adam Spielman, an analyst at Citigroup, said Bomhard’s first remarks about the company were “skewed by improving operations rather than changing and simplifying the form of the business”, “disappointing those investors who want to buy and then account for purchases”. ”.
Imperial’s share price, which has fallen nearly a third since the January peak, rose more than 2 percent when markets opened.
Bomhard said the company’s recent results were “disappointing”, but said it was positive that “consumer demand for tobacco has been quite resilient” after the pandemic.
The company said it expected to adjust its operating profit to a single and medium number in 2021, excluding its recent sale of the premium cigarette business.
But the company, which first cut its dividend 24 years ago this year, was cautious about the future. He warned that the “benefit of the pandemic” would be undermined next year by consumers, many of whom, backed by massive government subsidies so far, were likely to have “recessionary effects”.