Universal said operating income for the nine months ended 31 December 2017 was USD 111.2 million, down USD 7.3 million (EUR 5.9 million) on the comparable period last year. Operating income for the third quarter of fiscal year 2018 decreased from USD 83.2 million to USD 59.7 million, a drop of USD 23.5 million.
The company said the results reflected slight earnings improvements in its Other Regions segment, coupled with declines in its North America and Other Tobacco Operations segments. In the quarter ended December 31, 2017, results were lower in the Other Regions and Other Tobacco Operations segments, but increased modestly in the North America segment, the company said.
Universal said consolidated revenues increased by USD 5.3 million to reach USD1.4 billion for the nine months ended 31 December 2017, but third quarter consolidated revenues slipped by USD 15.2 million to reach USD 653.6 million for the three months ended 31 December 2017.
The modest improvement in revenues for the nine months was primarily a result of increased processing revenues and slightly higher green tobacco prices largely offset by lower sales volumes and other revenues. For the quarter ended December 31, 2017, the decrease in revenues was driven by lower sales volumes and lower other revenues, offset in part by higher prices and an improved product mix, Universal said.
George C. Freeman, III, chairman, president and CEO of Universal Corporation, said the company had expected some impact on results from lower burley crop volumes. "As expected, our earnings from operations so far in fiscal year 2018 have been impacted by lower burley crop volumes in Africa and fewer carry over crop sales in North America, offset in part by the return to normal crop volumes in Brazil, where we continue to see the benefits of higher volumes and lower factory unit costs.
"We also anticipate that our volumes for the fourth quarter of fiscal year 2018 will be lower than those achieved in the fourth quarter of the prior year, given reduced crop volumes available for sale in Africa this year, which typically have strong shipment volumes in the fourth fiscal quarter. As a result, we continue to believe our total lamina volumes for fiscal year 2018 will be modestly lower than those volumes in fiscal year 2017, Freeman said.