WOOD Flash – Philip Morris CR: 1H18 a mixed bag, with core revenue beat, but higher selling costs dragging EBITDA down
This morning (25 September), Philip Morris CR reported its 1H18 results. Revenues came in at CZK 6,422m, beating our expectations by 7% on the strong beat in the Czech Republic and Slovakia. The gross margin came in 3.4ppts stronger than we expected, but all gains were given back as the management reported a 5.6ppts increase in opex/sales, driven by a selling costs increase of 59% yoy. Finally, on the bottom line, PMCR reported net profit of CZK 1,747m and EPS of CZK 636, up by 6.4% yoy and broadly in line with our expectations. Overall, even with heightened selling costs, we believe management is on target to meet our FY18E DPS forecast of CZK 1,128 and dividend yield of 7.6%.Philip Morris CR is engaged in the production, sale, distribution and marketing of cigarettes and other tobacco products and the provision of related services. Co. manufactures the following brands of cigarettes: L & M, Bond, Marlboro, Philip Morris, Petra, Start, Sparta, and Chesterfield.
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