Yesterday, Scandinavian Tobacco Group A/S (STG), one of the world’s largest cigar companies and one of the few publicly-traded firms, saw its stock hit record highs ahead of its Q3 earnings announcements.
Today, the company released its results for Q3 2021. While its profits were up slightly from 2020, revenue decreased slightly compared to the same quarter in 2020. Notably, it appears the cigar market is stabilizing to a point where STG didn’t raise guidance for later in the year, something it’s been doing quite regularly since the start of the pandemic.
STG says it generated DKK 2.182 billion ($340 million) in revenue, a 2.2 percent decline from 2020. EBITDA before special items—a measurement of profits—was DKK 627 million ($97.3 million), up .9 percent compared to last year.
That margin was helped by DKK 31 million in what the company says was “certain duty refunds in the US.”
|Q3 2020||Q4 2020||Q1 2021||Q2 2021||Q3 2021|
|Net Sales||2.231 billion||1.992 billion||1.883 billion||2.156 billion||2.182 billion|
|EBITDA before special Items||614 million||397 million||527 million||606 million||627 million|
|Free Cash Flow||609 million||238 million||89 million||434 million||564|
“We deliver strong quarterly performance in line with expectations and maintain the positive momentum we have had throughout 2020 and 2021,” said Niels Frederiksen, ceo of STG, in a statement. “The combination of the integration of Agio Cigars, the growth in handmade cigars and our underlying transformation have significantly improved our performance and raised our earnings and margins levels. I remain proud and impressed with the way our organization has continued to deliver a strong performance throughout a challenging period”.
Notably, STG did not raise its guidance. The company has been doing so nearly once per quarter since the pandemic began.
STG is the parent company of Cigars International, General Cigar Co., Thompson Cigar, Forged Cigar Co., Agio, and other businesses throughout the U.S. and international markets.
Shares of STG, which is traded on the NASDAQ Copenhagen, fell 6.2 percent today to DKK 134.6, though that fall is from the stock’s all-time high of DKK 146.5 that it hit yesterday.