Rothmans Inc. reported lower earnings but higher sales Thursday as its share of the domestic market increased.
The tobacco company made $28.3 million (42 cents per share) in the second quarter, compared with $30.1 million (44 cents per share) in the second quarter of fiscal 2006.
Rothmans three-month trading
Sales (after excise duty and taxes) at its 60 per cent-owned subsidiary Rothmans, Benson & Hedges Inc. edged up to $165.2 million in the most recent quarter from $164.9 million a year earlier.
This despite an 10 per cent decrease in domestic sales volumes industry-wide for all tobacco products. The company said it is believed that the presence of contraband product contributed to the industry sales decline.
Domestic market share at Rothmans, Benson & Hedges was 32.6 per cent for the quarter, up slightly from 31.1 per cent a year ago.
"The success of [Rothmans, Benson & Hedges] in building its share of the legitimate market in the second quarter is unfortunately overshadowed by the continuing growth of contraband product," said John Barnett, the president and CEO of Rothmans.
"Illegal and untaxed products entering the market are clearly having a negative effect on the Canadian tobacco industry," he said.
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