Tobacco revenues were steady at nearly USD 344 million (EUR 276.6 million), but currency fluctuations cut into profit in the three months ended 30 June, Alliance One International announced.

Operating income fell to USD 5.3 million from USD 23.8 million and the company reported a net loss of USD 30.7 million. "Our profitability was impacted during the quarter by USD 13.0 million in foreign currency hedge costs this year versus income of USD 6.7 million last year or a USD 19.7 million change. The hedge expense this year is a result of significant Brazilian real volatility due to changing global economic outlook that will be offset as we sell the associated lower US dollar cost inventory later this year,” Chief Executive Officer Mark Kehaya said in the statement issued 2 Aug.
Alliance expects improved volume, revenue and profitability for the full fiscal year, Kehaya said. In the first quarter, volume sold rose 2 per cent to 76.9 kilogrammes. 
President J. Pieter Sikkel said Alliance is facing undersupply for some high quality tobacco. “As a result of the smaller crop sizes this year and reduced associated supply versus demand we anticipate lower yearend inventory levels versus last year that should also help reduce year-end debt levels,” he said in the statement. Alliance’s fiscal year ends 31 March. (ci)