Swedish Match, which is the target of an agreed $16 billion (€15.7 billion) bid by Philip Morris International, has reported second-quarter operating profit just above market expectations, aided by growth in the United States.
Operating profit rose to SEK 2.23 billion (€210 million) from SEK 1.96 billion (€190 million) a year earlier. Analysts polled by Refinitiv had on average forecast a profit of SEK 2.19 billion.
The company sells moist snuff 'snus' in Scandinavia, cigars in the U.S. and tobacco-free nicotine product ZYN which, like snus, is put under the upper lip and which chief executive Lars Dahlgren said had shown an "impressive volume trajectory" in terms of sales in the quarter.
Group sales increased 23% to SEK 5.56 billion (€530 million).
"The second quarter continued to demonstrate the attractive prospects of our business in several ways," Dahlgren said. "Our smokefree business delivered double-digit revenue growth in local currencies and outstanding results despite significant investments to support future growth."
Philip Morris Bid
Marlboro maker Philip Morris in May made a bid of SEK 106 per share for Swedish Match, which competes with British American Tobacco and Altria.
Several shareholders, including Bronte Capital, Aberdeen and Elliott Investment Management, have announced their opposition to the deal. Analysts say that could make completion difficult as the buyers need agreement from 90% of shareholders under Swedish law.
The acceptance period of the offer ends on September 30. Swedish Match has suspended share repurchases while it runs.
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