Scandinavian Tobacco Group, the European company known as STG, announced that the company’s second quarter profits and organic sales were down, results that the company called “disappointing and below our expectation.” STG is the parent company of Macanudo maker General Cigar Co., as well as Cigars International.
While the company won’t release its complete second-quarter report until Wednesday, this weekend it released highlights. Net sales for the quarter were DKK 2.3 billion ($309 million), which the company said reflects a decrease of 1.8 percent in “organic net sales.” Profits performed worse, as EBITA (earnings before interest, taxes and amortization) dropped 16.8 percent to DKK 544 million ($732,000).
In addition to handmade cigars, STG sells machine-made cigars, snus, and pipe tobacco. The company pointed blame at supply chain issues, and said its handmade cigar shipments for 2022 were expected to decline. Contrary to many other companies in the handmade cigar business, the company expressed pessimism for the current market. “The handmade cigar consumers in U.S. have become more cautious on the back of macroeconomic developments,” STG said in its release. “Consequently, for 2022 handmade cigar volumes are now expected to decline.”
The company went on to say it expected flat revenues, instead of the previously predicted increase, for 2022.