Winston cigarette maker Imperial warns of costs from prolonged Iran war but keeps outlook steady

Imperial Brands said ⁠on Tuesday that the Iran war could increase costs and ⁠hurt consumer demand if it drags on, ‌even as the British ​tobacco group had not seen any material impact to date which prompted it to reiterate its full-year outlook.

The US-Israeli war against Iran, now in its third month, has ​triggered an unprecedented ⁠crunch in supplies from the Middle East, raised energy and logistics costs for companies everywhere and prompted forecast cuts, project delays and cost-cutting drives as it ⁠weighs on ‌sentiment.

Imperial, which typically undercuts rivals such as British American Tobacco and Philip Morris on ‌pricing, warned in April that it might lose market share ⁠in its five biggest markets - the United States, Germany, the UK, Spain, and Australia - as ‌it focused on profitability over volumes.

The ‌Winston and Davidoff cigarette and blu vape maker ‌on Tuesday reported losses of 16 basis ‌points in market share in the first half across its core markets.

Imperial Brands has been working to expand its smoking alternatives business ⁠under a ⁠five-year strategy set by CEO Lukas Paravicini's predecessor, which aims to build scale in next-generation products while maintaining traditional tobacco operations.

Its adjusted operating profit of 1.64 billion pounds ($2.23 billion) rose a meagre 0.6% on a constant currency basis during the six months ended ​March, slightly missing market expectations of 1.66 billion pounds, ​as it grappled with ​persistent declines in cigarette sales and stiff competition for smoking alternatives.