Universal Corporation operating profit fell by one third and sales by nearly 4 per cent in the three months to 30 Sept, heavily influenced by lower volume and margins in South America, the independent leaf dealer said.

“Although production of flue-cured and burley tobaccos outside of China is higher this year, our leaf volumes shipped in the first half of the fiscal year were significantly lower than last year's levels. At the same time, foreign currency re-measurement and exchange losses and continuing margin pressures in Brazil from volatile leaf prices there, have dampened our results,” said Chief Executive Officer George Freeman. “Looking forward, we expect the second half comparisons to normalise with shipment volumes meeting or exceeding those of last year.”
Second quarter operating profit from tobacco operations fell to USD 49.5 million (EUR 36.7 million) from USD 75.1 million and by more than half to USD 55.7 million for the first half of fiscal 2014. Higher prices on less volume generated sales of USD 650.1 million in the second quarter, down from USD 675.2 million.