Q1 Profits Down At STG
Macanudo maker Scandinavian Tobacco Group (STG), the parent company of General Cigar Co., Cigars International and one of the world’s largest producers of cigars, reported a modest increase in net sales but a considerable drop in net income for the first quarter of 2025. The company also changed its outlook for the year, dialing back expectations due to the impact of tariffs and a weaker U.S. dollar on its operations.
Net sales for the first quarter of 2025 rose by 1.3 percent, to 2 billion Danish kroner ($301 million), powered in part by the acquisition of Mac Baren, a Denmark-based pipe-tobacco company. STG had a particularly large drop (8.8 percent) in organic sales, which are revenues generating from existing business, rather than those gained via acquisition. Net profits for the quarter were 52 million korner ($7.8 million), compared to 125 million kroner ($18.8 million) for the first quarter of 2024.
“We are adjusting our full year expectations to reflect the impact of a weaker USD and increasing tariffs on imported goods to the U.S.,” said STG chief executive officer Niels Frederiksen. “Although consumer sentiment is affected negatively, the underlying business trends remain largely unchanged and our focus is on navigating this period of increased uncertainty . . . with the main priority being to protect and enhance market shares and protect cash flow.”
STG said it posted a 9 percent decrease in handmade cigar sales, a three percent drop in machine-made cigar sales and a 43 percent drop in next-generation products, particularly the discontinuation of online distribution of the ZYN nicotine pouch. The new tariffs announced by the Trump istration on all imported products has caused STG to downgrade its full year predictions, as U.S. sales for nearly half (45 percent) of the company’s revenues.
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