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UNITED STATES

Universal reports first quarter gains

08 Aug 2018. Operating income at Universal Corporation for the first quarter was up 31 per cent, at USD 8.4 million (EUR 7.2 million), in what was a strong start to financial year 2019, the leaf merchant said in its first quarter results.

Revenues for the three-month period, which ended 30 June, increased by USD 95.1 million, or 33 per cent, to reach USD 379.7 million (EUR 327.8 million). The leaf merchant credited the gain to higher total volumes, processing revenues, and “a more favorable product mix”.

Universal reported net income of USD 13.2 million for the period, up USD 9.6 million on the USD 3.6 million in net income it reported for the first quarter of fiscal year 2018. The company said a non-recurring tax benefit received in the quarter had increased net income by USD 6.9 million.

George C. Freeman, III, chairman, president, and chief executive officer of the company, said it had benefited from the carryover of sales that had seen shipping delays in the previous quarter, largely in North America. Freeman said the company had seen high demand for wrapper style tobaccos and related processing services. “We have increased our offerings to meet demand for natural wrappers in both the United States and Europe and continue to be a leading wrapper tobacco supplier,” Freeman was quoted as saying.

Operating income for the company’s North America segment, at USD 9 million, was up USD 6.6 million over 2018 first-quarter results, due to higher volumes and carryover sales. Mexican tobaccos had also been shipped earlier than in the previous fiscal year, the company said. Revenues for the region increased by USD 62.2 million to reach USD 115.6 million.

Universal’s Other Regions segment recorded an operating loss of USD 2 million for the period, with a USD 5.9 million drop in the USD 3.9 million operating income reported for the same period in the previous financial year. Results were down in the segment, despite higher processing volumes in Europe and South America, due to higher costs selling, general and administrative costs incurred, Universal said. Reported results for Asia were down, due to lower sales volumes and “higher currency remeasurement losses,” the company said. Revenues for the Other Regions segment, at USD 207.9 million, were up around 13 per cent.