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Rothmans annual profit up 18 per cent despite contraband and other challenges 

Cigarette maker Rothmans Inc. (TSX:ROC) grew its full-year earnings by 18 per cent to $117.6 million, but said that despite certain regulatory changes to the industry, it was still being hit by contraband and competitive challenges.

The company said net sales at subsidiary Rothmans, Benson & Hedges Inc. rose eight per cent to $670.6 million on price increases, while Rothmans' net profit for the year was $1.72 per diluted share, compared with $99.8 million or $1.46 per share in the previous year, when RBH sales were $618.6 million.

CEO John Barnett, who has long complained about the impact of contraband on the company, said Friday that the results were "a substantial achievement in a market where we continue to see industry volume erosion as a result of the contraband activity."

"While we are encouraged by some of the recent government announcements involving certain regulatory changes and enforcement strategies, we believe that the will to execute these and other required initiatives is the key to mitigating the contraband issue," Barnett said during a conference call.

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