Camel and Pall Mall show low sales volume

Published on February 10th, 2015 00:00

Reynolds American Inc. completed fiscal 2014 with a stressful final quarter, with the firm revealing Feb. 10 that pension, merger deal and legal charges reduced its profit margin almost by 50% to $144 million.

When eliminating the charges, Reynolds had net revenue of $466 million, up 12%.

Camel Filters Cigarettes

For the full year, Reynolds' net revenue decreased 14.4% to $1.47 billion. When eliminating charges and gains, net revenue increased 4.9% to $1.83 billion.

The recent suggested merger deal would involve selling three Reynolds brands - Kool, Salem, Winston, one Lorillard brand (Maverick) and Lorillard's blu eCigs to Imperial Tobacco Group PLC for $7.1 billion. That could provide Imperial around a 10% U.S. market share.

Susan Cameron, Reynolds' chief executive and president, said just some words on the company's offered $27.4 billion merger deal for Triad rival Lorillard Inc., primarily for Newport, the best-selling U.S. menthol brand. Both companies' shareholders all okayed the deal Jan. 28.

Susan Cameron said the company carried on obtaining marketplace power with standard cigarettes Camel and Pall Mall, and its best-selling moist snuff brand of Grizzly.

Pall Mall decreased 0.2 percentage points to a 9.3% market share. It had transferred Camel for 3rd place for few quarters during the heart of the economic crisis, taking advantage of Reynolds pricing special discounts, but lately placed back into fourth.

Total cigarette volume dropped 4.9% to 14.9 billion sticks. The industry cigarette volume fell 2%. Reynolds' overall share of the cigarette market dropped 0.3 percentage points to 26.4% contrary to last year.

Reynolds' growth brands look like on solid footing with share growth for Camel and Natural American Spirit.