directors report and accounts 2006 - Latin America

 
 

 Latin America

Latin America

Profit in Latin America increased by £81 million to £611 million due to good performances across the region, coupled with a stronger average exchange ratein Brazil. Volumes grew in many of the markets which led to an overall increase of 2 per cent to 153 billion.

In Brazil, volume and market share increased, benefiting from marketing initiatives and continuing anti-illicit trade operations by the government. Profit increased substantially as a result of higher volumes, improved margins and the appreciation of the local currency.

The strong profit growth in Mexico was driven by higher margins, efficiency programmes and synergy benefits from the contract manufacturing agreement with Canada. Volumes were slightly down as the growth in international brands, notably Pall Mall, was more than offset by the decline of local low-price brands. In Argentina, strong volume growth was achieved through an excellent performance by Viceroy and a reduction in illicit competition. However, profit was lower due to severe price competition.

In Chile, profit grew strongly as volumes and prices increased, the product mix improved and the currency strengthened. GDBs, Kent, Lucky Strike and Pall Mall, led the volume and share increases. In Venezuela, higher margins and increased volumes, led by Belmont and Consul, resulted in an excellent increase in profit and market share. The Central America and Caribbean area showed a significant profit increase as a result of higher volumes and margins, an improved product mix, supply chain savings and the benefits from productivity initiatives.

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