The cigarette giant Imperial Tobacco said the price war and the smoking ban in Spain hit its performance over the past nine months, but said the impact on full-year profits would not be as bad as previously expected.
The maker of Davidoff cigarettes was also able to push through price rises, which helped it grow total revenues by 2 per cent. This offset a 3 per cent fall in cigarette volumes over the nine months to 30 June.
Alison Cooper, the chief executive of Imperial Tobacco, hailed growth in sales volumes of its Davidoff, Gauloises Blondes and West brands, particularly in emerging markets. She added: "We made strong fine-cut tobacco gains in a number of EU markets and we also increased volumes of our luxury Cuban cigars, despite difficult conditions in Spain."
Imperial Tobacco warned in June that adjusted operating profits in Spain – which introduced a smoking ban in public places in January – would be £110m lower for the year to 30 September.
Its rival BAT triggered a price war there by heavily promoting its cheap Pall Mall brand in a move to gain market share from Imperial and Marlboro maker Philip Morris.
But after increasing its prices on 2 July and a halving in expectations for a charge on its logistics business to £20m, Imperial now expects profits in Spain to reduce by just £70m. Investec has forecast global profits of £2.52bn at Imperial this year.Reuse content