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The
company said it would deconsolidate RBH from its financial
statements, and it cut its full-year 2019 diluted earnings per
share forecast to at least $4.90 at prevailing exchange rates,
from at least $5.28 in the forecast it made on March 4, shortly
after the ruling in Quebec.
The Court of Appeal of Quebec upheld the bulk of a 2015 decision
that awarded about C$15 billion ($11.19 billion) to smokers in
the Canadian province, a blow to several big tobacco companies,
including RBH.
Some observers criticized the creditor protection calling it an
attempt to avoid making payments.
"The company's strategy is to obtain a sweetheart settlement of
all tobacco lawsuits in Canada, and then to carry on business as
normal", said Rob Cunningham, senior policy analyst from the
Canadian Cancer Society.
"The company is highly profitable and is not anywhere close to
bankruptcy."
On an adjusted basis, the current forecast for full-year 2019
represents earnings per share growth of at least 8 percent over
last year, the Marlboro cigarette maker said.
The deconsolidation, which will not have an impact on the
company's current annualized dividend rate, will result in an
estimated one-time non-cash charge of about $0.10 per share, it
said.
The operating cash flow for full-year 2019 is now estimated to
be about $9.5 billion, down from "at least $10 billion" in the
forecast it made on Feb. 7.
The creditor protection process, granted by the Ontario Superior
Court of Justice, will allow RBH to carry on its business in the
ordinary course, Philip Morris added.
(Reporting by Shubham Kalia and Kanishka Singh in Bengaluru;
Editing by Leslie Adler and Sandra Maler)
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