STG Posts Slightly Higher Sales But Reduced Profits In First Quarter
Scandinavian Tobacco Group A/S, one of the world’s largest cigarmakers, reported a small increase in sales for the first quarter of 2023. The company, which is based in Denmark, posted net sales growth of 1.3 percent, to 1.963 billion Danish kroner ($285 million). Profits, however, were down 10.9 percent with earnings before interest, taxes, depreciation and amortization at 474 million kroner ($69 million), compared to 532 million kroner ($77 million) in the first quarter of 2022.
The company placed blame on inflation and production issues. “STG remains on track to deliver on the 2023 guidance with results for the first quarter being up against strong comparisons in 2022. We have stabilized our production issues, but we are still recovering from this impact as well as cost inflation into 2023, affecting margins negatively,” said chief executive officer Niels Frederiksen. “The Group is making good progress on our ambition to grow the size of the company with two transactions announced within the last few months.”
The company is the parent of General Cigar Co., makers and distributors of such leading brands as Macanudo, CAO and the non-Cuban versions of Cohiba and Punch. It also owns Cigars International, the major retailer of cigars. In its statement, STG called consumer demand for handmade cigars in the United States “resilient.” STG recently completed the acquisition of Alec Bradley.
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