Wed | Dec 2, 2020

Cigarette trader Carreras reports big sales spike

Published:Friday | June 5, 2020 | 12:14 AM

SMOKERS SO far have maintained their cigarette habits, giving resilience to Carreras Limited earnings at the apex of the local coronavirus crisis.

Announcing that its earnings appear largely COVID-19-resistant, Carreras reported a billion-dollar spike in sales for its financial year ending March. But the company also noted that the longer the shutdown of the economy and the curfews persist, the more vulnerable its earnings would become.

Jamaica began implementing containment measures against the coronavirus around mid-March, including shutting down some types of businesses and setting limits on public gatherings.

“It was agreed that while these measures persisted, our portfolio could be affected mainly driven by the restrictions imposed on restaurants, bars and mass entertainment gatherings, which account for 5.0 per cent of our total sales,” the cigarette trader noted in its earnings report.

“However, as of the third week in May 2020, these restrictions have significantly relaxed,” Carreras said.

The Government has also lifted work-from-home orders, bars once again are allowed to operate under specific conditions, and air travel is slowly starting up again, amid a phased reopening of the economy that began June 1.

The distributor of Craven A and Matterhorn brands of cigarette earned annual revenue of $14.1 billion, up nine per cent from $12.9 billion in the year ending March 2019. Net profit grew to $3.6 billion or 74 cents per share, from $3.4 billion or 70 cents per share.

On June 25, Carreras will pay an interim dividend of $0.20 per share, which beats the $0.14 paid a year earlier. The cigarette company, which usually issues dividends four times per year, paid out $3.1 billion to shareholders in 2019 and $4.1 billion in 2018.

The cigarette company went through a change of leadership on February 1, on the resignation of Marcus Steele. He was replaced as managing director by Trinidadian Raoul Glynn. The new head was country manager for Carisma Marketing Services in his home country, a portfolio that included the English, French and Dutch Caribbean markets. Both Carreras and Carisma are subsidiaries of British American Tobacco Plc.