Universal Corporation sales of flue-cured and burley leaf declined 10 per cent in the three months ending 30 June, influenced by what the company said was a slow start to the season that is typical in an oversupplied market.

“We are also seeing the effects in Brazil of reduced sales of leaf due to the assignment of some of our farmer contracts to a subsidiary of Philip Morris International last year,” said George Freeman, chairman, president and chief executive, in a statement 4 Aug.
Burley leaf and flue-cured sales fell USD 47.7 million (EUR 33.3 million) to USD 417.3 million. USD 43.2 million of the decline was recorded in the category including South America, Africa, Europe and Asia.
Combined with other tobacco operations, sales at the company based in Richmond, Va., declined USD 59.5 million to USD 479.5 million. Operating income for the business quarter, which is the first quarter in Universal’s fiscal year, declined to USD 35.5 million from USD 41.1 million.
“Although levels of uncommitted inventory are up in both absolute and relative terms, we are beginning to see them decline in some areas as the trading season develops in the second fiscal quarter.  In fact, sales activity has increased through July and remains at a brisk pace,” Freeman said. (ci)