Philip Morris held its AGM yesterday. As expected, shareholders approved dividends of CZK 1,606/share. Despite an increase in the volume of cigarettes sold (up by 146m to over 22bn) consolidated sales declined by 11% y/y in 2004 due to higher consumption of cheaper brands because of the increase in the cigarette excise tax in 2004. PMCR’s market share declined by 5pp to 73.5%, which is higher than the previous estimate of 69% (released in February), according to the ACNielsen Agency. The impact of lower sales on net income was partially offset by the lower average number of employees (1,581 compared with 1,645 in 2003) and the appreciation of the CZK against the USD.