Tobacco group Imperial Brands said on Thursday that smokers have cut down their purchases of cigarettes after strong buying during the pandemic, prompting increased volume declines and a flat revenue outlook for the first half, excluding Russia.
During the pandemic, customers had given big tobacco firms such as Imperial a boost as they had more cash to spend and more chances to smoke.
As expected, Imperial Brands said its exit from Russia would result in revenue for the six months that ended 31 March to be 'slightly below' from a year earlier.
The maker of Winston cigarettes and Backwoods cigars said it was on track to meet its annual expectations and its outlook of growing revenue and operating profit, despite the lacklustre first half.
Adjusted operating profit for the first six months was also hit by increased investments in next-generation products, along with the exit from Russia and lower volumes, it said.
The company, which transferred its Russian business to local investors last year, said excluding the impact of its Russian business, net revenue was expected to be flat on a constant currency basis.
Imperial Brands shares were down 1.5% in early trade.
On the 18 May Imperial Brands noted that it was on track to meet its full-year goals helped by strong sales of e-cigarettes and heated tobacco in Europe, boosting its shares to a more than two-year high.