Imperial Tobacco New Zealand reports profit of NZ$19.8M for the year ending Sept. 30, down 12% from year-ago period; sales up 9.6% to NZ$432M, rising amid 10% excise tax increase, expansion of its Wellington factory
WELLINGTON, New Zealand
April 16, 2014
(Australian Associated Press)
– Imperial Tobacco New Zealand has boosted annual sales after expanding its Wellington factory to supply the Australian market and taking on a 10 per cent excise tax hike.
Sales at New Zealand's second largest cigarette company rose 9.6 per cent to $NZ432 million ($A402.83 million) in the year ended September 30, according to the company's annual report.
Profit fell 12 per cent to $NZ19.8m.
Imperial has spent $NZ50m to increase capacity at its only New Zealand plant, which exports 80 per cent of production to Australia.
The company exported $NZ75.6m worth of cigarettes and tobacco, and paid $NZ286m worth of duty to the government last year.
Sales to Australia helped offset weaker turnover in New Zealand, it said.
"Domestic market volume is down slightly, reflecting normal trends, whilst Imperial Tobacco New Zealand's domestic volume has remained relatively flat," Adam Cleave, the parent company's intergovernmental relations manager told BusinessDesk on Wednesday.
"Production at our Petone plant has increased largely in response to market demand in Australia."
Imperial's smaller rival, Philip Morris (New Zealand), had a 13 per cent sales gain to $NZ83m in calendar 2013.
Its annual report showed profit rose 20 per cent to $NZ1.2m last year, after a 30 per cent drop to $NZ993,000 in 2012.
Early in April, parent Philip Morris International said it would close its manufacturing plant in Australia because of government regulations that reduce the "fire risk" of cigarettes.
In 2013, the New Zealand arm of the company purchased $NZ5.1m worth of product from its Australian counterpart.
New Zealand is looking to follow Australia in introducing plain packaging in a bid to reduce brand recognition and shrink the cigarette market.
Tobacco-producing countries are taking action against Australia at the World Trade Organisation saying the plain-packaging regulation is an intellectual property infringement.
British American Tobacco Holdings (New Zealand), the nation's largest cigarette business, hasn't yet published its 2013 annual report.
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