Bulgarian Cigarette-maker's Profit Grows Eightfold in H1 2012

Bulgaria's largest cigarette-maker Bulgartabac Holding has seen its consolidated profit grow 8.5 times in the first half of 2012 year-on-year, the company announced Wednesday.

Thus, in H1 of 2012, Bulgartabac, which was sold by the Bulgarian government to a subsidiary of the Russian bank VTB for EUR 100.1 M in September 2011, registered a total profit of BGN 27 M.

The BT Holding group will retain BGN 23.5 M from the profit, while the rest will go to minority shareholders in the company's three subsidiaries – Sofia BT, Blagoevgrad BT, and Pleven BT.

In the second quarter of 2012, Bulgartabac had a profit of BGN 13.3 M beating its result of BGN 10.2 M from the first quarter

In the first half of 2012, BT's total sales grew by 46% year-on-year to BGN 244 M; the growth in the second quarter was 53% year-on-year, to BGN 114 M.

A total of 82% of Bulgartabac's produce goes to exports, the Holding said in its media statement; in addition to cigarettes, BT Holding also exports tobacco leaves and oriental tobacco, which make up about 2% of its sales.

Bulgartabac has retained its leading market share in Bulgaria, with 33.8% of the Bulgarian market of cigarettes.

BT Invest, owned by Russia's second-largest bank VTB, won at the end of August 2011 a tender to buy a 79.8% stake in Bulgartabac for EUR 100.1 M.

The contract bans the resale of the holding in the next ten years, a condition which can be skipped through a change in the ownership of BT Invest; this possibility has been admitted by the Bulgarian Privatization Agency.

Austria-registered BT Invest, behind which stands Russia's second-biggest bank VTB, remained the only bidder for the Bulgarian tobacco monopoly after British American Tobacco and Austria-based CB Family Office Service dumped the sale.

Two of the less profitable plants of Bulgartabac holding - in the cities of Plovdiv and Stara Zagora - were sold in 2009 through the Sofia Stock Exchange - for BGN 31 M and BGN 18 M respectively.

The holding currently owns the two larger and more consolidated factories in Sofia and Blagoevgrad, a processing plant in Yasen near Pleven, as well as a number of commercial brands.